HONG KONG: Swiss banking group UBS said on Tuesday it had signed a memorandum of understanding with the world’s largest lender by assets, Industrial and Commercial Bank of China (ICBC), to explore collaborations in China and overseas markets.

UBS has long been keen to grow its footprint in China that already includes a mutual fund joint venture and a private fund business, but earlier this year it appeared to scale back expansion plans due to headwinds to China’s economic recovery and geopolitical tensions.

The banks will explore cooperation in asset management, wealth management, and investment and corporate banking, according to a UBS statement.

The deal includes product development and distribution, client coverage, global market trading, investment and financing, research, asset custody and exchange of expertise.

UBS completed an acquisition of its smaller cross-town rival Credit Suisse in June, through which it now holds a 20% stake in ICBC Credit Suisse Asset Management Company, a fund joint venture previously partially owned by Credit Suisse.

Looming uncertainties of doing business in China have dampened the appetite of Western business, with an exit ban imposed on a senior executive of Japanese bank Nomura adding to the perceived risks.

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Earlier this year UBS announced it had shelved plans to set up a new fund unit in China and decided to maintain ownership in the ICBC fund joint venture.

In the months since taking over its former rival, UBS also scrapped plans for Credit Suisse to set up a locally incorporated bank in China.

UBS has also made significant job cuts in the region, letting go of the majority of Hong Kong-based investment banking staff and the securities research unit at Credit Suisse.