Hong Kong regulators probe UBS on initial public offerings

AP News
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Posted: Oct 28, 2016 6:31 AM

HONG KONG (AP) — Swiss bank UBS said Friday that Hong Kong regulators are investigating its work on some initial public offerings on the southern Chinese financial center's stock market.

UBS also said that the city's Securities and Futures Commission notified it this month of plans to take action against the bank and certain unnamed employees over its work as a sponsor of those IPOs.

Possible penalties include paying fines and restitution or a suspension from providing corporate finance advisory services in Hong Kong, the bank said in its latest quarterly earnings statement .

Hong Kong tightened up its stock listing rules three years ago by making the banks responsible for preparing IPO documents and carrying out due diligence liable for misleading information.

In a brief statement, the commission confirmed that an investigation was underway.

"We do not have any further comment to make at this stage," it said.

UBS also announced it made 827 million Swiss francs ($835 million) in profit for the third quarter, down from 2.1 billion francs in the same quarter a year earlier, when the bank had one-time tax benefits of 1.3 billion francs.

The company said profits were supported by strong results from its wealth management business, which saw 9.4 billion euros in net new money flowing in in Europe. It also said it had cut 1.5 billion francs in annual costs, on its way to a target of 2.1 billion francs in annual savings by the end of 2017.