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UBS to Fuse European & Emerging Markets Wealth Management

Amid a challenging revenue environment, restructuring continues to be the core agenda for most global banks. In a latest move, Swiss banking giant, UBS Group AG UBS, plans to merge its European and emerging markets wealth-management business as part of streamlining operations, according to a Bloomberg report.

The bank aims to reduce the number of offshore booking centers from about ten to 3 – Switzerland, Germany and the UK – through consolidating cross-border operations with domestic businesses. Per the bank’s memo, the onshore business in Europe will be incorporated in the bank’s new continental hub in Frankfurt.

The persistent market volatility and underlying macroeconomic uncertainties are expected to result in continued client risk aversion and low transaction volumes. Further, several concerns linger, including headwinds from negative interest rates and the strengthening of Swiss franc, particularly against euro. Therefore, wealth managers are under pressure for boosting revenues.

Notably, UBS’s move to eliminate two separating reporting lines for domestic and cross-border operations will aid clients in getting more opportunities for investments, even beyond their domestic regions.

Additionally, the restructuring will help UBS to adhere with regulators’ need of being transparent in operations and client assets. Notably, for Europe and the emerging markets, excluding the Asia-Pacific region, the Swiss bank plans to create a new position for managing business risks and regulations.

 “Converging client needs and regulatory trends across EEM represent a unique opportunity to better align ourselves to serve our clients,” Paul Raphael, head of wealth management for the region, said in the memo. “The ‘One Market’ approach will allow the whole wealth management organization to improve the strategy for the respective markets,” he added.

In addition, UBS plans to reshuffle its management to simplify the structure and better serve clients.

Post the global financial crisis, UBS has been undertaking strategic restructuring measures and has gradually shifted focus on fortifying its wealth management business, in order to reduce reliance on capital intensive investment banking. Apart from streamlining operations, the company has been reducing headcounts in several units. Therefore, such moves are anticipated to reduce costs and aid revenues.

At present, UBS Group AG sports a Zacks Rank #1 (Strong Buy).

UBS Group AG’s shares gained around 10.5% year to date compared with 11.2% growth recorded by the Zacks categorized Foreign Banks industry.



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