Buying Business.....
Rumor has it that UBS is going to take a $1 billion stake in Bank of China as a strategic investor. Like Bank of America's silly $3 billion stake in China Construction Bank, UBS also wants to have a stake in a local bank since they have no lending operation in China nor in Hong Kong. By taking stakes in these institutions, these banks will make huge fees in the underwriting of these banks when they do finally come to market. There must be a quid pro quo...take a stake and get the underwriting business. Citigroup decided to not take a stake in China Construction Bank, probably since they realized that it was a stupid investment. But they also have been dropped as a underwriter on the deal.
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