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UBS eyes Bank of China IPO
UBS would like to win the business of bringing Bank of China to the stock exchange, but its current talks about taking a stake in BOC are not aimed at securing that business, UBS' finance chief said, according to the Reuters. "You do not and cannot buy stakes in people pre-IPO on the premise that that is going to give you a role in the IPO," Chief Financial Officer Clive Standish told Reuters in an interview. But the world's seventh-largest bank would be interested in participating in the flotation, expected by the end of 2005 or the start of next year, after it already helped BOC list its Hong Kong arm in 2001. "Our investment bank is very active in equity capital market activities, so it would be a natural piece of business to aspire to. But the (possible) investments have nothing to do with the IPO," Standish said. Standish declined to comment on how the talks were proceeding, but refuted a media report suggesting the bank would jointly take a stake in BOC with the Asian Development Bank. "We're not jointly bidding with anyone else," he said. UBS said in June it was considering buying a $500 million stake in BOC to cooperate in certain areas of investment banking, in a deal that would cement the position of UBS' investment bank in China's fast-growing economy. Some of UBS' competitors have been buying up far larger stakes in Chinese institutions, such as Bank of America's $3 billion stake in China Construction Bank, also announced in June. Analysts have variously criticized UBS for being too timid in China and praised it for its cautious attitude. But Standish said the stake just reflected UBS' strategy. "We think (the stake) is of an appropriate size for somebody like UBS given our business mix," Standish said. "Remember that outside Switzerland we're not in retail banking. Others who have taken stakes in China tend to have ... global retail aspirations, which we don't." UBS aims to increase its Asian business to around 15 percent of overall revenues in the next five years, from about 10 percent now and is eyeing joint ventures in China with local market players. Beijing has courted foreign investors for its troubled banking sector, as a means of gaining global expertise and much-needed capital ahead of global stock listings. Earlier on Tuesday, UBS said second-quarter net profit rose by 5 percent, but the results missed market forecasts as lower trading income overshadowed a jump in fee income.
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