Swiss finance giant shows confidence in country's economic prospects with plan to double its payroll

Swiss bank UBS Group AG said on Monday that it plans to double its headcount in China, offering a vote of confidence when concerns about slowing economic growth have been unsettling both the domestic and global stock markets.

Sergio Ermotti, chief executive officer of UBS, said that the bank will add about 600 staff in China, a significant proportion of which will be allocated to its wealth management business.

"This decision is a natural evolution of forwarding our business in Asia, which is also in line with our expectation for our business to grow to the next level, in particular the wealth management business," Ermotti said in an interview with China Daily on the sidelines of the bank's annual China conference in Shanghai.

China's long-term growth prospects and the rising wealth of Chinese citizens will continue to be a strong business engine for UBS as the nation is already a significant contributor to the bank's regional earnings, Ermotti said.

Part of the employment increase will also go to core business segments including investment banking, asset management, fixed income and the "back offices" in China that offers technology and legal support to UBS' global operations, said Ermotti.

The bullish comments came as China's volatile A-share market has triggered chain reactions in global markets amid growing investor concern about uncertainties associated with the depreciation of the yuan.

While admitting that the coming year will be very challenging, Ermotti said that the bank tends to focus on China's medium- and long-term growth prospects.

"If we assume a reasonable 5 percent growth for the next 14 years, then in that time China will add another $20 trillion to its economy. It is adding another whole China to the global economy," he said.

UBS' plan to revamp its China business by doubling its payroll also came as many global financial institutions including Morgan Stanley, Deutsche Bank AG, Citi Bank and Barclays Plc have been slashing their employee numbers to reduce costs and weather tough market conditions.

Cutting people to reduce costs is common practice by big banks when the market is difficult, said a financial analyst at a global investment bank on condition of anonymity.

"UBS' decision may not be the response to any short-term market changes. It is much more about its long-term strategy in China," he said.

Meanwhile, UBS is also seeking to double both the manpower and revenues of its equities business in China over the next five years.

Fang Dongming, head of China equities at UBS, said that the bank will seek to diversify its equities business from the traditional commission revenues under the Qualified Foreign Institutional Investors program to new business including margin trading, short selling, derivative business, and cross-border financing and investment business.

"Doubling our revenues in the next five years means that we need to achieve at least double-digit growth each year," Fang said at a news conference in Shanghai.