* To boost coverage of small/mid-sized companies in China
* A-P co-CEO warns Asia risks asset bubbles
(Adds fresh comments from IB head)
By Denny Thomas and Elzio Barreto
HONG KONG, March 31 (Reuters) - Swiss bank UBS AG, the leader in equity underwriting in the Asia Pacific region, plans to double its China staff in three to four years and boost its investment banking head count in the region by 20 percent this year, two top officials said on Thursday.
UBS is betting on continued strong equity issuances in the region, led by Chinese companies. The pipeline of initial public offerings (IPOs) is stronger than last year this time, Matthew Hanning, head of investment banking (IB) for Asia Pacific, told Reuters in an interview.
"We are a big believer in the structural growth story of Asia," Hanning, who was recently named as the sole head of Asia Pacific IB said.
He said the recent pull back in some Asian stock markets and the fund flow out of the region does not change the long-term view. "This region is not short of capital," Hanning added.
Hanning declined to say how many bankers his division will have after increasing the head count by 20 percent this year. But he said UBS has close to about 50 IPO mandates for this year, making it one of the busiest years on record for UBS.
Equity capital market bankers in China will account for the bulk of the hiring, Hanning added. UBS has topped the ECM league table for the sixth straight year in 2010, despite losing some top bankers over the past year.
UBS is also planning to increase its footprint in China. UBS's regional co-chairman and co-CEO Chi-Won Yoon told a forum at the bank's Hong Kong headquarters that the bank planned to expand stock research coverage to small and medium companies in China to help with their capital raising needs, including potential stock market listings.
"We are investing heavily in our business in China to ensure we can serve that sector."
Yoon didn't disclose UBS's current staff count in China, the world's second-largest economy. The headcount could grow to 1,000 to 1,200 in that time period, said a source with knowledge of the expansion plans.
UBS plans to increase the research coverage to 350 companies, the source added.
China's capital market has been the growth engine for many Wall Street banks in the region as expansion petered out in other parts of the world.
"Once we have that know-how, and we can lead with research, we can build our IB (investment banking) business, so they can advise them to go public and the asset management business, so they can handle the funds for them," Yoon added.
Yoon warned that low real interest rates in several Asian economies have the potential to create asset bubbles and it was time for Asia "to wean ourselves off U.S. economic policy".
"Asia's problems across the region are inflation and a threat of bubbles and this requires a tightening of monetary policy, not easing," Yoon added. (Reporting by Elzio Barreto and Denny Thomas; Editing by Ken Wills and Jon Loades-Carter)