March 15, 2018 / 3:18 AM / 3 days ago

UBS merges equity, debt capital markets businesses in Asia: memo

HONG KONG (Reuters) - UBS Group (UBSG.S) is merging its equity and debt capital markets businesses in Asia Pacific in a move that comes as its powerhouse equities franchise faces a suspension in Hong Kong from leading initial public offerings (IPOs).

FILE PHOTO: A UBS advertisement is displayed on top of a commercial building in Hong Kong, China May 2, 2017. REUTERS/Bobby Yip/File Photo

According to an internal memo seen by Reuters on Thursday, ‎Gaetano Bassolino, currently head of the debt capital markets (DCM) business in the region, will become head of Asia Pacific capital markets.

“It is clear there are synergies that exist across ECM and DCM, such as overlapping investors and product cross over,” David Chin, UBS head of Asia Pacific corporate client solutions business, which covers investment banking, told staff.

A UBS spokesman confirmed the contents of the memo.

Sources within the bank told Reuters discussions about the change in structure had been underway for a while.

Several other banks operate a similar system in the region and globally in an effort to better co-ordinate the services they offer clients.

UBS’s internal reorganization comes just days after the bank disclosed the Hong Kong securities regulator had blocked it from sponsoring IPOs for 18 months. The suspension, which the Swiss bank is appealing, is not effective until its appeal has been ruled upon.

    Sponsors in Hong Kong carry liability for misinformation contained in prospectuses but can expect the biggest share of the deal’s fee pool for their role of driving the transaction.

    UBS has long been an equities powerhouse in the region, only once ranking outside the top three in Asia-Pacific league tables for the past decade, according to Thomson Reuters data.

    So far this year, the Swiss bank is second to Goldman Sachs Group (GS.N), with $3.8 billion of deals to its credit compared to Goldman’s $6.2 billion.

    In debt markets, UBS is a smaller player, ranking 11th in the region this year for bonds sold internationally outside Japan, with $2.6 billion of deals to its credit compared with $6.5 billion and $4.9 billion for HSBC (HSBA.L) and Citigroup (C.N), respectively, who typically lead the rankings.

    Reporting by Julie Zhu; Writing by Jennifer Hughes; Editing by Muralikumar Anantharaman

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