UBS has announced a major reshuffle of its China operations and is set for a major hiring spree as it seeks to strengthen its position as one of the country's leading foreign investment banks and asset/wealth managers.
UBS is expected to double its headcount in China to 1,200 employees by 2020, a person familiar with the matter told FinanceAsia on Thursday, after an internal memo showed the Swiss bank combining its Hong Kong-based corporate client solutions (CCS) China team with its Hong Kong and Taiwan team to create a Greater China business.
CCS is the investment banking arm of UBS providing deal advisory as well as equity and debt underwriting to its clients.
Jointly heading the newly expanded China business with immediate effect are two veteran UBS bankers, Xuewen Bi and John Lee, the memo seen by FinanceAsia showed, underlining the significance of a move that appears to have two key objectives.
Not only does UBS want to build out its existing mainland Chinese securities joint venture, UBS Securities, it also wants to bulk up its offshore China presence and broader securities and asset and wealth management businesses.
The context for this is the continued integration of Hong Kong's and China’s capital markets and the opening up of Chinese domestic markets, including new foreign ownership rules announced late last month that allow foreign-owned majority stakes in local financial firms.
As a result, foreign banks now have unprecedented access to China’s vast and growing population of high-net-worth individuals and can offer non-Chinese clients greater access to the world's second-largest equity market.
ONE-STOP SHOP
For UBS, there are potential efficiency gains too because having one China-focused business should allow it to streamline its product lines and offer both investors and companies seeking to raise capital a one-stop shop for their needs.
UBS Securities will co-ordinate with the business once it increases its stake in the mainland joint venture to 51%, the newly created maximum.
The looming June 1 inclusion of China A-shares in the MSCI Emerging Markets index should see an acceleration of interest from global investors, at least from funds that have hitherto been unable to invest in mainland Chinese shares due to their restricted mandates.
And UBS is ideally placed to serve institutional and high-net-worth individuals, according to Thomas Fang, head of UBS’s China equities, who last September spoke of "tremendous demand from our clients to invest in China’s domestic market.”
Xuewen Bi, a 20-year investment bank veteran with UBS since 2010, will be based in Beijing as head of corporate client solutions for UBS Securities, responsible for building out the team on the ground.
John Lee will be Hong Kong based and responsible for the bank’s activities outside of mainland China. Prior to joining UBS in early 2017, Lee spent 20 years at Bank of America Merrill Lynch, where he was managing director and head of Hong Kong, Macau and Taiwan investment banking.
Both Bi and Lee will work closely with Catherine Cai, executive vice chairman of the investment bank and David Chin, head of CCS Asia Pacific.
