UBS to seek full control of Chinese securities joint venture by 2020

UBS became first foreign lender to receive approval to take majority stake in its securities joint venture in December

Move comes as China has relaxed rules on foreign ownership of financial companies ahead of schedule

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UBS on Tuesday reported a 16 per cent drop in third-quarter profit to 1.05 billion Swiss francs from a year earlier. Photo: AFP

Published: 7:06pm, 22 Oct 2019Updated: 10:30pm, 22 Oct 2019

UBS said on Tuesday that it expects to take full control of its securities business in mainland China next year as Beijing moves to further open up the country’s financial sector.

The Swiss bank received approval in November to take a controlling stake in UBS Securities China, making it the first foreign bank allowed to do so after ownership rules were relaxed last year.

In July, the Office of Financial Stability and Development Committee and the State Administration of Foreign Exchange announced the country would undertake a series of measures to open up China’s financial sector, including removing shareholding limits on foreign ownership of securities, insurance and fund management companies next year. That was a year earlier than planned by Chinese authorities.

“The accelerated removal of the ownership caps for securities companies means that UBS is expected to be permitted to increase its stake in UBS Securities China from the current level of 51 per cent to 100 per cent by 2020,” UBS said as part of its third-quarter results on Tuesday. “The exact effective date remains to be clarified.”

A UBS spokeswoman declined further comment when contacted by the South China Morning Post.