UBS is set to become the first foreign bank to profit from eased banking regulation in China. Its rivals are likely to follow suit.
Until recently, foreign banks weren’t allowed to hold a majority stake in a joint venture in the giant market. UBS, Switzerland’s No. 1, for instance owns a quarter of UBS Securities.
Signs are that the bank will soon be allowed to increase its stake to 51 percent, according to a report in Swiss broadsheet «Neue Zuercher Zeitung». UBS already calls the shots at the company, which mainly trades in securities.
Rivals Will Follow
The option for UBS arises as two smaller owners want to sell their stakes, according to the newspaper report. UBS will have to pay about 122 million Swiss francs ($123 million) for the stakes.
The competition will probably follow up with similar steps soon. Credit Suisse wants to take a majority stake in its local joint venture and U.S. giant Morgan Stanley has similar plans.
