Mubasher: UBS Group is currently in talks to acquire a majority stake in its Chinese securities joint venture (JV), according to its CEO Sergio Ermotti.

The acquisition comes as banks look to utilise China’s pledge to open its financial markets further and expand in the largest Asian market, Bloomberg reported.

"So we are in line with our plans to grow our business, regardless of the stake,” Ermotti told Bloomberg in an interview, adding that “if we can have a more rounded financial participation in our business here, we do welcome that."

Commenting on the time frame required to acquire the 51% stake, the UBS top official said it may be “a matter of months.”

Other global securities giants including Morgan Stanley and Goldman Sachs Group Inc. recently said that they too were looking to buy majority stakes in their Chinese ventures.

The sudden interest in China comes after a government announcement in November that it would relax foreign ownership restrictions. It also said it would allow 51% stakes before abolishing the cap completely after another three years.

New hires

The top official further revealed that Zurich-based UBS was planning to double the number of people working for the bank in China over the next five years, indicating that UBS may have around 1,200 in staff working for it by the end of 2018.

Recent hires in China were across the board, and included new staff for the bank’s risk management and technology functions. “So we are also developing knowledge and know-how that we export for the rest of the group from China,” Ermotti told Bloomberg.

Other topics

“If I look into 2018, I do expect probably a more normalising environment for volatility than the ones we saw in the last few quarters," he added during the interview.

Ermotti welcomed extra clarity on Basel capital requirements. However, he said it was “premature” to make any announcement on share buybacks by UBS.