Following the takeover of its former rival, UBS has to reconsider its plans to expand its presence in the Chinese securities business. It's looking for buyers.
UBS is exploring a sale of Credit Suisse's Chinese brokerage business. According to media reports, it's contacted several firms, including Warburg Pincus and Citadel Securities, as well as Chinese institutions to explore their interest in buying Credit Suisse's Chinese securities business.
According to anonymous sources, the bids are expected to start at one billion yuan ($137 million), «Bloomberg» (behind paywall) reported. Since UBS already controls a securities firm in China it can't hold two licenses for the same business.
No Doubling Up
So far, Warburg Pincus hasn't made an offer and Citadel declined to comment, according to the report. UBS CEO Sergio Ermotti said earlier this week during a visit to Beijing the bank is still reviewing its options regarding Credit Suisse's securities business in the People's Republic.
The two Swiss financial giants have been steadily expanding their interests in China's lucrative growth market, especially as the People's Republic has been steadily opening up its financial sector in recent years. Credit Suisse wanted to acquire the 49 percent stake of its Chinese partner Founder Securities for $160 million and was awaiting regulatory approval for a full stake.
According to China Securities Regulatory Commission (CSRC) rules, a company can't be a majority shareholder in more than one securities firm. Wall Street giants JPMorgan and Goldman Sachs were the first international banks to fully acquire stakes in Chinese companies in 2021.
