UBS is reportedly shutting down parts of its China private funds business, resulting in a third of staff being laid off.

The move, first reported by Reuters, forms part of the bank's plans to reduce operating costs in China.

Sources told the newswire that UBS is closing down up to 17 of 19 equity and bond funds, with money being returned to investors.

They said that UBS Asset Management Shanghai will begin axing roughly a third of its 50-strong team.

The news comes after Bloomberg reported in January that UBS aims to grow its wealth and asset management business in China, despite a slowing economy.

US and European lenders have recently been considering their position on China due to the slowing economy and the country’s tougher stance on dealmaking. Credit Suisse, which was acquired by UBS following its collapse early last year, dismissed its entire wealth management team in China after UBS decided not to take on the staff.

Other US and European banks have been ‘ring-fencing’ their Chinese operations amid heightened tensions between western nations and the Asian country.

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