If you’re an investment banker or private banker at UBS in Hong Kong or Singapore (or if you want to become one), you are advised to…cover China. While UBS’s fourth quarter earnings highlighted its short-term struggles in Asian equities trading, its new 2018 Annual Report reveals more about its long-term, China-focused ambitions in a region that the bank expects to be (along with the US) the “strongest” contributor to its future profit growth.
UBS’s Asia Pacific headcount reached 12,119 at the end of December, 3,160 more than a year previously, although this was mainly due to technology hiring at its Indian hubs in Airoli and Pune, according to a spokesperson for the firm. Not all of UBS’s recent and future recruitment in Asia centres around Indian tech, however. In wealth management and investment banking, the bank’s new report is bullish on China.
UBS’s investment bank now makes more money in Asia Pacific (30% of global IB profits) than it does in EMEA (25%). Right now, UBS’s headcount plans in the region are focused on China. In December, UBS became the first foreign bank to take advantage of new Chinese regulations and secure a majority 51% stake in a mainland securities joint venture. Having control over the JV, UBS Securities China, now gives UBS a “great foothold for future expansion”, according to its annual report.
The report contains several other references to UBS’s planned expansion in China, a country which “presents a significant long-term opportunity” for the bank, because of its “economic expansion and wealth creation”. More specifically, UBS wants to grow in China by “further strengthening” Corporate Client Solutions, the unit within its investment bank which advises clients on business opportunities and helps them raise capital. UBS is targeting both “onshore and offshore” growth for its solutions team, suggesting jobs will also open up for Hong Kong-based investment bankers who cover China.
The December integration of UBS Securities China has already had an impact on headcount. UBS’s global IB workforce reached 5,205 at the end of last year, up 383 from 12 months previously, “primarily as a result of the consolidation”. The UBS spokesperson says the firm does not break down headcount numbers by country, but he confirms that UBS has “been hiring in China” for its joint venture.
Separately, as we already know from its fourth quarter earnings, UBS has been adding plenty of Asia-based private bankers to its Global Wealth Management division – 101 joined in 2018 alone. More hiring is likely to follow. UBS’s new annual report says its “business growth” in wealth will primarily occur in the US and Asia, adding that it’s already the largest wealth manager in Asia by invested assets.
“Global Wealth Management derives revenues from all the principal regions, but has a greater concentration in Asia than many peers,” the report states. Moreover, UBS’s private bank wants to “take advantage” of wealth creation in China because that country is “opening its financial markets”. This suggests UBS will need to hire more China-desk bankers in Hong Kong and Singapore, which are its main private banking hubs in the region and already serve thousands of mainland millionaires and billionaires.
Have a confidential story, tip, or comment you’d like to share? Contact: email@example.com
Image credit: sivarock, Getty