Geneva - UBS AG said Tuesday that its arm in Saudi Arabia has received approval from the Capital Market Authority there to begin securities business activities in the Kingdom.

The permission, the Zurich-based bank said in a statement, would allow UBS to expand its presence in Saudi Arabia, the dominant economy in the region. Its wing there will now have wealth management and investment banking divisions in addition to providing other financial services.

UBS said it had partnered with local interests when setting up its Saudi business, including Mohammed Al Dhoheyan, a former head of the Development and Management House for Investments, and MerchantBridge, an equity house.

UBS, which has found itself facing large write-downs and other significant losses in Western markets, said it aims to continue to grow in the Gulf region.

The Swiss bank recently lost its standing as the world's largest wealth manager, and now places second on that list, after heavy hits with the collapse of the subprime market and troubles with the United States tax authorities led to large outflows of capital.(dpa)