What is your message to the 3600 or thereabout participants here at the GCC this year? And what's your general outlook for business in China, for your bank?
Well, actually, it's also great for me to be back here. Last year was a quite important year for China. I think that we saw huge interest coming back on the Chinese markets. The stock performance was great. And we see today, we have almost 3600 participants. You go through across the board from corporates, institutional clients, family offices, coming from all over the world. We see also more interest from overseas, which is indicating the momentum of the Chinese market. So I think we believe this is going to continue the secular trend supporting China in terms of growth in innovation, in technology and biotech is here to stay and investors are realizing that.
What kind of deal flow, though, are you starting to see as we are starting to see China get some momentum? You talked about the stock market, the CSI 300, up about 17% last year. So it is gaining some steam. But also outbound deal flows seems to be growing quite a bit, whether it's investing in factories in Europe or in the global South. It seems like capital is not only coming into China, where foreign interest is obviously looking at that rebound, but also the capital is moving abroad.
Yeah, I mean, look, this is a good mix of businesses. But when you look at, for example, the underweight of international investors to China, almost half from around two and a half percent in 2024 to 1.3% or so in 2025. So this is a significant change on a year on year basis. And this is the main driver. We continue to see a lot of activity around IPOs, particularly you saw the record high IPO issues last year in Hong Kong, which are probably going to stay with ourselves in 2026. We see a lot of activity across Asia inbound and outbound. I mentioned Japan is up three folds. So in general, I would say that you will continue to see momentum of Chinese investor investing abroad, but also capital coming into the country.
What's going to be your priority onshore for 2026? Last year you got the full 100% securities license. What's going to be the...
We are working on all of this. We also last year we made a capital increase in our local entities. And I think this year we are now planning to launch a panda bond. And so I think we want to continue to foster our presence in China. We have been in mainland China for 35 years. We have been in Hong Kong for 60 years. So this is really part of our core business. I mean, if you think about it, we are managing in the region more than a trillion of assets, 800 plus in wealth management and 215 in asset management. So we want to continue to reinforce that position. But at the same time, our leading position in the investment bank across the board, where we are a leader in the region and in China, on mainland China particularly, and also in asset management through our very successful joint venture with ICBC.
What can you tell us about the arranging of that panda bond, the size and timing and the likes?
This is still to be determined, but the decision has been taken to do so. Kind of on the you still have some personnel issues on the cost reductions from the integration with Credit Suisse.
Is that separate from what you're going to plan to hire across Asia and in China?
Yeah, look, when I look at Asia in general, the integration is over, is done. So I think that we completed the integration in 2024, mainly in Asia, across the board. The investment bank has been closed and asset management the same. So as I just mentioned, we are hiring both in China but broader broadly speaking also in Asia. In Japan, for example, we have been expanding our capabilities and leveraging really the complementarity of Credit Suisse and UBS together, where we not only have a broader footprint in terms of capabilities, but also of geographic footprint.
How would you assess how your businesses in Asia are doing versus other regions, whether it's Europe or Asia?
It has been growing very fast in the last year. It is probably the biggest engine of growth in nominal terms, accounting for around a quarter to 30% on average in the last five years of our profits. So as I mentioned, we manage more than a trillion of assets out of the 7 trillion we manage globally. So it's a growing, steady growing business. When you look at the engine of growth, GDP growth is definitely going to help. Four and a half percent in China is quite important, but it is a driver for growth in the entire region. We are selectively gaining some market shares in areas where we want to compete. And last but not least, this monetization, this IPO calendar is very important to our wealth management business because this is really helping us to drive many mining and new assets into our wealth management franchise.
Well, speaking of that IPO pipeline in Hong Kong, it's been quite strong. A lot of the new economy companies. But there are also concerns that the new economy companies, whether it's Mini Max or others, that profitability, just like the companies in the United States and Western markets, that sustainability doesn't have a lot of visibility. But what's your views on whether we're in a bubble and how long that potentially could still last?
I don't know if we are in a bubble or not, but of course, when you see this kind of multiples and performance, you have to ask yourself, is this a repeat of what we saw in maybe in an older time in 2001? Exactly. The TMT bubble and so on and so forth. I would say that in general, first of all, our advice is very clear: diversification, no concentration of risk around the sector. Technology is here to stay. And what we should not really make the two issues from an investor standpoint is very important to diversify, not to get into a trap of trying to pick the winner or the loser. But the truth of the matter is that the first wave was probably around the technology sector. Now we're going to see how embracing and implementing AI can help other parts of the economy become more vibrant and more efficient. And that's probably going to be also the next side of the story.
You also have to you can't discount the fact that most of the deal flows right now are in China. The interest is in these new economy companies. So could you kind of quantify that the type of deal flows, whether it's underwriting or other types of businesses or services from your bank, are tied directly to what has been a priority of central government policymakers here?
