UBS wants to take on Wall Street banks again. But the beleaguered Swiss bank wants to leave one area out.
Big bank UBS has made clear its expansion plans in the United States. “But we are not yet developing our full potential in the U.S.,” UBS Chairman Colm Kelleher said in an interview with the “Neue Zürcher Zeitung” on Saturday.
Poor integration
“In Asia, we are number one. There we are strong not only in asset management, but also in equities and investment banking advisory,” the top executive extolled.
Why doesn’t this work in the U.S.?, he therefore asked rhetorically.
UBS bought Paine Webber in 2000, but the bank was never properly integrated, he said.
The major Swiss bank is the only non-U.S. bank that has a real brokerage unit in the U.S., and this needs to be better integrated and expanded, Kelleher explained.
Low capital commitments
“We want to further expand our position as a leading global asset manager, primarily in the U.S. and Asia,” he continued, describing the strategy. However, he said it is also clear that UBS does not want to expand the investment bank.
UBS wants to grow exclusively in wealth management, he said. “This is a business with little risk and capital commitments,” the manager emphasized.
UBS is the first choice for ultra-high-net-worth individuals (UHNWIs), he said. “Wealthy Americans like to be with a bank like UBS,” he expressed with conviction.
New brooms sweep well
With regard to the failed billion-euro takeover of Wealthfront, which was also reported on by muula.ch, the Chairman said that the focus was now even clearer without the digital platform. This actually helps the big bank, he added.
“Our added value is in serving wealthy and ultra-wealthy private clients. That’s what we need to focus on, especially in the U.S.,” the Irishman emphasized.
What is interesting here is that this focus was apparently not seen in this way before the acquisition. However, the manager defended himself saying that this had been decided before his time as Chairman.
Rescue from sinking
“However, there will be no acquisitions in the U.S.A. in the foreseeable future,” assured the 1957-born manager. Apart from tactical measures, there will be no strategic changes in the U.S.A., he added in reassurance.
After all, the Swiss taxpayer had to bail out the big bank with tens of billions during the recent financial crisis, and few people would want to do that again.
Valuation of U.S. business
The deferred tax assets (DTAs) of UBS in the U.S.A. are so gigantic that the bank actually has to keep its activities in the United States high so that no problems with write-offs arise there.
In the Americas, he said, growth is purely organic. “Of course, we will consider smaller acquisitions in wealth management if they make sense,” the UBS chairman qualified.
He also rejected the idea of taking over the stumbling big bank Credit Suisse. “There will be no major strategic changes,” Kelleher affirmed.
Global markets
And Europe is not one of the priorities, according to the UBS Chairman. “The EU financial markets are structurally weakened by the U.K.’s exit from the EU,” he said. But this strengthens Switzerland’s position, he added.
However, the markets are global and not European, the Chairman told the “NZZ” in this regard.
However, he also sees room for improvement at UBS. The bank is too complex and in some cases too bureaucratic, he cautioned. “It’s almost impossible to get a two-page summary about anything,” the top manager lamented his woes.
Jan. 14, 2023/kut./ena.
