China allows UBS to control local securities business

USB AG, which currently owns about 25 percent of shares in the USB Securities Co. Ltd. joint venture, said in a statement that it would acquire stakes from China Guodian Capital Holdings and COFCO. (AFP)
Updated 01 December 2018
0

China allows UBS to control local securities business

  • “This is the first foreign-controlled securities company approved by the China Securities Regulatory Commission after the implementation of the Measures for the Administration of Foreign-invested Securities Companies”
  • Laws limiting foreign ownership of local financial firms have long stopped global banks from independently operating in China and limited their growth

BEIJING: UBS has been authorized by China’s securities regulator to take a controlling stake in a local business, making the Swiss giant the first foreign bank allowed to do so under new rules.
Beijing in April relaxed the rules in the financial industry in a move to open up the economy.
“The China Securities Regulatory Commission (CSRC) recently approved UBS AG to increase the shareholding ratio of UBS Securities Co. Ltd. to 51 percent,” the regulator said in a statement late Friday.
“This is the first foreign-controlled securities company approved by the China Securities Regulatory Commission after the implementation of the Measures for the Administration of Foreign-invested Securities Companies.”
USB AG, which currently owns about 25 percent of shares in the USB Securities Co. Ltd. joint venture, said in a statement that it would acquire stakes from China Guodian Capital Holdings and COFCO.
Other financial firms like Wall Street titan JP Morgan Chase and Japan’s Nomura Holdings are still awaiting approval.
Laws limiting foreign ownership of local financial firms have long stopped global banks from independently operating in China and limited their growth.
But Beijing said it would liberalize shareholding limits in the financial services industry last year, soon after US President Donald Trump visited.
Officials moved to make good on the pledge in April, immediately allowing foreign investors to take 51 percent stakes in securities firms and fund managers, with pledges set out to eventually allow full control.
Earlier this week, two European insurance giants Allianz and Axa received approval to expand their footprint in China — Allianz has been allowed to start a company fully funded by foreign capital while Axa would take full control of a joint venture.
Beijing has pledged to open up its economy as it looks to head off a possible trade tensions have increased with the United States, which accuses it of using unfair practices to get an advantage for its own firms and destroying American jobs.
Trump has slapped punishing tariffs on more than $250 billion in Chinese imports so far this year and China responded with its own tariffs on $110 billion in US goods.
But the US president has threatened to target the remaining $267 billion worth of Chinese imports as well, hitting Apple iPhones and laptops produced in China.
Trump is set to meet with Chinese leader Xi Jinping in Argentina on Saturday where they are attending the G20 summit.


HSBC 2018 profit rises 16% but below estimates

Updated 12 min 18 sec ago
0

HSBC 2018 profit rises 16% but below estimates

  • HSBC reported a profit before tax of $19.9 billion for 2018 compared with $17.2 billion the year before
  • Europe’s biggest bank by market capitalization said it would pay a full-year dividend of $0.51 per share

HONG KONG/LONDON: HSBC posted on Tuesday an increase of 15.9 percent in 2018 profit, as the bank avoided tax writedowns that marred its results a year earlier and earnings in its key market of Asia grew.
HSBC reported a profit before tax of $19.9 billion for 2018 compared with $17.2 billion the year before. The profit for the year, however, was below an average estimate of $22 billion, according to Refinitiv data based on forecasts from 17 analysts.
Europe’s biggest bank by market capitalization said it would pay a full-year dividend of $0.51 per share, roughly in line with analysts’ expectations. The bank was confident of maintaining the dividend at this level, it said.