(Yicai) June 25 -- A Beijing government-owned assets manager will take control of Credit Suisse Securities China by acquiring 85.01 percent of the joint venture brokerage from UBS Group and Founder Securities.

UBS will sell a 36.01 percent stake in CSS to Beijing State-owned Assets Management for CNY650.5 million (USD91.4 million), leaving the Swiss bank with a 15 percent interest, its said yesterday. Founder Securities said it will offload its entire 49 percent to BSAM for USD124 million.

Beijing-based CSS was set up in 2008 by Credit Suisse Group and Founder Securities. Credit Suisse was integrated into UBS in June last year before the pair merged on May 31. UBS needed to sell a stake in CSS as the merger led to it having two majority-owned brokerages in China, but regulations only allow a firm to control one.

UBS Chief Executive Sergio Ermotti said the sale to BSAM, a partner of the Zürich-based bank for nearly 20 years, was the best solution. China is a crucial market for UBS, he added, noting that the acquisition of Credit Suisse has further expanded the presence of UBS in the Chinese market.

The stake purchase represents a further extension of the ties between BSAM and UBS, the state-owned enterprise said, pointing out that is one of the few municipal-managed SOE in China’s capital to focus on the financial sector, with interest that span banking, securities, consumer finance, and other areas.

The acquisition of a majority stake in CSS is also a concrete measure to implement the national and Beijing city requirements for financial services to support the real economy, it added.

Changsha-based Founder Securities said the divestment was aimed at revitalizing its assets and enhancing the efficiency of capital utilization, with the expectation of increasing annual profit by CNY273 million.

For the first three months of this year, CSS reported a net loss of CNY34.4 million (USD4.7 million) on revenue of CNY19.3 million. Last year, it lost CNY199 million on revenue of CNY157 million.

Editor: Martin Kadiev