Related Event: Banking Sector in China
BEIJING - Switzerland's largest bank, UBS, will pay 500 million US dollars for a stake in the Bank of China (BOC), one of the country's Big Four state-owned commercial banks, the two banks said in a joint statement in Beijing here Tuesday.
A Reuters report also quoted UBS as saying on Tuesday it will invest $500 million in unlisted Bank of China, as it signed a strategic co-operation deal with the Chinese bank in investment banking and in the securities business.
"We regard this agreement as a natural development of our long-term relationship with Bank of China," UBS Chief Executive Peter Wuffli said in a statement.
UBS, the world's seventh-largest bank, said the two banks would become partners in various investment banking and related securities business areas in China and for Chinese clients.
Wuffli said the deal would allow the Swiss bank to combine its products, services and experience with state-run BOC's brand name, distribution abilities and customer base. Switzerland's UBS, the world's largest wealth manager by far, had earlier said it was considering buying a $500 million stake in BOC.
Bank of China has named Goldman Sachs and UBS to manage its planned $4 billion stock listing. Bank of China International investment banking arm will also be a lead underwriter.
Bank of China is expected to go public by the middle of next year, generating $120 million or more in underwriting fees.
Like other Western banks, UBS is trying to get access to wealthy clients in China's booming economy as the country gradually moves to open up to foreign companies and clean up its troubled banking sector.