(Bloomberg) -- UBS Group AG’s exposure to stricken property developer China Evergrande Group is “immaterial” and limited to the execution of collateral calls on margin loans, Chief Executive Officer Ralph Hamers said Thursday.
The Chinese company’s financial difficulties “have not been keeping me up at night,” Hamers said, who heads a bank with one of the top wealth management businesses in Asia. UBS has made some margin calls related to Evergrande but these have been “well executed,” he said during a Bank of America Corp. conference on Thursday.
“Even when you look at the broader Chinese construction sector, it is in client funds but they are widely diversified,” so Evergrande’s troubles are not expected to lead to any real issues, Hamers said.
The debt-laden property giant has caused jitters on global markets over doubts that it will be able to pay its creditors, including holders of a dollar-denominated bond due Thursday. The extent to which global banks are exposed to the firm isn’t yet clear, though UBS rivals Credit Suisse Group AG and Citigroup Inc. have indicated they’ve limited risk of losses from the developer.
Chinese regulators have told Evergrande to avoid a near-term default on dollar bonds, and communicate pro-actively with bondholders, people familiar with the matter said.
Read More: China Tells Evergrande to Avoid Near-Term Default on Bonds
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