UBS sees Asian growth outstripping its other regions and wants to take a growing slice of the enormous wealth the region will create over the next few years, the world's largest asset manager said on Tuesday.
"Wealth creation across Asia is very strong, not just in China," Chief Financial Officer Clive Standish told Reuters in an interview. "It's a massive market place."
Already, the Asia-Pacific region accounts for around 10 percent of overall revenues at the Swiss-based bank, and Standish said he wanted to see that proportion grow to about 15 percent in the next five years.
"We see really strong growth in the business, and this year revenue growth is up almost 50 percent in Asia-Pacific," said Standish, who ran the region for UBS before he took over as group finance chief in April.
"We would be very optimistic about that growth continuing," Standish added.
UBS had revenues in its financial business of nearly 8.5 billion Swiss francs ($7.08 billion) in the third quarter, roughly steady on the year.
The bank earlier on Tuesday reported a slight fall in quarterly net profit to 1.671 billion francs from 1.685 francs a year ago amid a slowdown in investment banking.
Analysts say Asia Pacific has the most global potential for wealth creation, attracting scores of private banks that offer asset management services to wealthy clients.
Global players like UBS, Credit Suisse and HSBC have become the market's biggest providers.
Individual wealth in the region is expected to hit $8 trillion in 2007, from an estimated $4.8 trillion in 2000, according to a recent study by KPMG.
BRANCHING OUT: UBS opened a branch in Beijing earlier this year and plans to apply for a branch office in Shanghai soon. It also opened a wealth management office in Japan.
More than a third of the roughly 1,100-strong growth in UBS's headcount over the past year in investment banking alone came from Asia.
Standish said UBS was "extremely interested" in establishing joint ventures in China with local market players to give it better access to the fast-growing market there.
"China is going to create its own massive capital market itself," he said. "It is very important to develop a domestic capability there over a five- to 10-year horizon."
Beijing has pledged to make it easier for foreign banks to take stakes in local banks, as it tries to whip its domestic financial sector into shape ahead of a full opening to foreign players planned after 2006. But Standish also reiterated that UBS, for now, was not interested in any large-scale acquisitions, and would instead stick with its policy of seeking small, bolt-on acquisitions wherever they fit, as long as the price is right.
"We don't see any need for a transformational acquisition," he said.
UBS has returned much of its surplus cash to shareholders, buying back some 3.4 billion Swiss francs ($2.83 billion) worth of its stock so far this year, part of a maximum 6 billion-franc buyback programme that runs until March.