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  • UBS Puts Itself Under Pressure To Build on Strong Results

    UBS Puts Itself Under Pressure To Build on Strong Results

    After last year’s strong financial results Switzerland’s largest bank will struggle to outdo its previous performance as market conditions turn and markets get off to a bad start in 2022. 

    UBS’s financial results for the financial year 2021 exceeded expectations by far, even considering the large provisions it had to make for various legal cases, including its ongoing lawsuit in France.

    Several factors which influenced last year’s business are likely to do so again in 2022. There is also the threat of a slowdown in business activity, as top management acknowledged on Tuesday.

    1. Higher Return for Shareholders

    The proposed dividend of 50 cents per share for 2021 is significantly higher than the 37 cents paid in 2020. This underscores the bank’s intention to let shareholders participate in its success. Continued share buybacks, which the bank also announced on Tuesday, will additionally contribute to an earnings squeeze in the future.

    2. Investment in Technology

    Aware of the fact that banks are now more like IT companies or platforms, UBS is not only expanding its digital offering (see point 6), but it also intends to focus more on technology. It has set itself the goal to invest around 10 percent of its earnings in technology in the future. However, doing so will merely allow it to catch up with its competitors.

    3. The French Legal Sword of Damocles

    The good result is clouded by high provisions for the court case in France. This is mainly reflected in the fourth quarter 2021 figures in global wealth management (GWM) and in the Swiss unit (personal & corporate banking). The latest provisions were booked in these two units.

    The court in Paris is demanding a total payment of 1.8 billion euros, which UBS is again appealing. In the fourth quarter of 2021, the bank set aside 650 million euros, bringing the total amount of provisions to 1.1 billion euros. The outcome of the proceedings are still open and likely to impact the bank’s share performance to some extent in the current year.

    4. A Bouquet of New Targets

    Against the backdrop of good performance and taking into account that CEO Ralph Hamers had not formulated any new targets since taking office in the fall of 2020, UBS has set out business and ESG ambitions for the first time and adjusted its financial targets.

    The changes appear to be relatively modest. It’s therefore unsurprising that top management expressed confidence Tuesday morning in achieving these targets this year or, depending on the definition, «over the cycle» market conditions permitting and the strategic plan can continue to be successfully implemented.

    5. Major savings still ahead

    The favorable results don’t obscure the fact that UBS and its employees still face enormous cost-cutting efforts. By 2023, the bank aims to save a total of 1 billion dollars by streamlining structures, exiting additional markets and by increasing automation and simplifying processes.

    Last year, UBS saved 200 million dollars, with the figure set to double to 400 million dollars, and a further 400 million in 2023. This is the only way UBS will be able to realize its growth plans (see point seven).

    6. Digital Offering

    With its recent acquisition of California-based digital wealth manager Wealthfront, UBS has reaffirmed its intention to target younger, less affluent clients abroad. As Hamers explained on Tuesday, this was just the beginning.

    The bank also wants to target similar clientele in Asia, namely China, a spokesman emphasized. Furthermore, the bank is seeking additional partnerships (joint ventures) in other countries for further expansion, as is already the case with Sumitomo (for wealth management) in Japan and with Banco do Brasil (in investment banking).

    7. Outlook: Trees Don’t Grow To The Sky

    UBS’s good performance last year cannot necessarily be used as a blueprint for 2022 , even if many investors are currently convinced that it will be. On Tuesday morning, UBS shares gained more than 6 percent on the stock market.

    At the same time, a bank spokesman acknowledged that client activity had been very subdued in the first month of this year, with the level of optimism among clientele falling in recent surveys. In fact, some clients may be looking for bargain entry prices after recent turmoil in financial markets. Still, the proportion of cash in portfolios is still quite high at 23 percent.

    In Asia, growth is likely to be more subdued in 2022 than it already is, as seen by the sharp decline in Lombard loans, while costs in this extremely competitive market remain high. The cost/income ratio (CIR) already increased slightly last year, and unless the rigorous cost-cutting measures in the group are fully implemented, it will probably be difficult to reduce the CIR.

    Against this background, it isn’t surprising the new growth target for pre-tax profit in global wealth management (GWM) of 10 to 15 percent has been set relatively cautiously.

    Several central banks have ushered in a new era in the financial markets with their now more restrictive monetary policies. Under these premises, stock market appreciation and thus growth in customer portfolios is likely to be more leisurely.

  • UBS Acquires U.S. Digital Wealth Platform for Affluent Segment

    UBS Acquires U.S. Digital Wealth Platform for Affluent Segment

    UBS has agreed to acquire California-headquartered digital-only wealth platform Wealthfront, amidst broader plans to tap into the affluent segment worldwide.

    UBS has signed an agreement to acquire Wealthfront in an all-cash transaction valued at $1.4 billion, according to a statement.

    The deal will allow UBS to accelerate its growth plans in the U.S., increase reach into the affluent segment as well as expand distribution and other capabilities.

    Wealthfront complements our core business in the U.S. providing wealth management to high net worth and ultra-high net worth investors through trusted relationships with financial advisors, and will enhance our long-term ambition to deliver a scalable, digital-led wealth management solution to affluent investors, said UBS group chief executive Ralph Hamers.

    After the transaction, which is expected to complete in the second half of 2022, Wealthfront will become a wholly-owned subsidiary of UBS and operate as a business within UBS Global Wealth Management Americas.

    Based in Palo Alto, California, Wealthfront is a digital-only platform providing access to financial planning capabilities, banking services and investment management solutions with a focus on affluent millennial and ‘Gen Z’ investors.

    Currently, Wealthfront has over $27 billion of assets under management with more than 470,000 clients in the U.S. Following integration, Wealthfront clients will also benefit from access to UBS’ wealth management capabilities including content from its chief investment office, its global footprint alongside its shelf of products and services.

    The newly signed agreement follows recent comments by Hamers about UBS’ plans to target mass affluent customers worldwide via an offering that combines digital capabilities and access to human advice.

    It is clear that we should cater for the entrepreneurs, but we should also cater for that segment of the market that may not be completely digitally engaged, but also doesn’t want to have 100 percent client-advisor coverage, but something in the middle, he said during the bank’s third-quarter results last year, calling the segment a sweet spot.

    According to Hamers, the plan is to first make a push in the U.S. before rolling out an offering to target affluent clients globally.

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  • UBS Digital Expert Exits for Fintech Role

    UBS Digital Expert Exits for Fintech Role

    The digital expert who jump-started UBS’ platform plans is leaving for a job at a Swiss financial start-up.

    Martha Boeckenfeld is exiting at UBS, where she has was brought in as head of digital platforms and marketplaces in Switzerland over two years ago, finews.com has learned. The 56-year-old German native will join the advisory board of Gentwo, a securitization fintech.

    A spokesman for the Swiss bank confirmed her exit, which comes several months after her job was quietly downgraded last September. Boeckenfeld’s team at UBS will report to Asia wealth co-head August Hatecke, effective immediately.

    Gentwo was founded by Philippe Naegeli and Patrick Loepfe four years ago. Its Assetrush platform seeks to connect financial innovators and investors both digitally as well as physically, through events.

    The Zurich-based start-up recently added Spiros Margaris to the board that Boeckenfeld is joining, alongside Beat Hodel and Marc Bernegger

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  • Bitcoin Suisse Taps Ex-UBS Banker as CEO

    Bitcoin Suisse Taps Ex-UBS Banker as CEO

    The Swiss crypto broker’s CEO is stepping down after four years. His replacement is an ex-UBS banker well-known for his technology expertise.

    Arthur Vayloyan is stepping down as CEO of Bitcoin Suisse at the end of March, the Zug-based crypto firm said in a statement on Friday. He will be replaced by Dirk Klee, effective April 1. Vayloyan will remain one of five board members of the firm.

    Like Vayloyan, Klee comes from traditional financial services: he was the operating chief of UBS’ flagship wealth unit for five years before in 2018 taking the top job at Barclays for wealth management and investments in the U.K.

    Bitcoin Suisse didn’t provide a specific reason for the CEO change. The news comes one week after co-founder Niklas Nikolajsen relinquished the chair job to Luzius Meisser.

    The nine-year-old firm is coming off a turbulent 2021: it was forced to retreat on a Swiss banking license, after being told by regulator Finma that it hadn’t done enough to root out money laundering. This led Bitcoin Suisse to strengthen its ranks several months later.

    It remains wildly profitable: Niklajsen said Bitcoin Suisse is on its way to nearly doubling last year’s net profit of 24.1 million Swiss francs ($26.1 million), in a social media post last month.

    Klee, a German native, has made a career of innovating traditional financial services: he ran a large part of Blackrock’s exchange-traded funds business in Europe before moving to UBS in 2013.

    There, he was responsible for a $1 billion technology project to unify UBS’ disparate wealth platforms. Most recently, he oversaw the rollout of a digital tool for Barclays’ affluent U.K. clients.

  • UBS Accepts Verdict for French Subsidiary

    UBS Accepts Verdict for French Subsidiary

    UBS is accepting convictions against its French subsidiary while keeping its legal options open in a tax dispute with French authorities for the group.

    UBS will pay a 1.9 million euro ($2.1 million) fine to French authorities. Last week’s French court ruling against Switzerland’s largest bank entailed a guilty conviction over tax offenses and money laundering, a 3.75 million euro fine plus 800 million euros in damages, and a 1 billion euro corporate bail.

    While the banking group is appealing against these convictions, it has accepted the verdict against its French subsidiary UBS (France).

    In a media statement from December 13, UBS (France) was acquitted of money laundering, but convicted of unlawful client solicitation for which the bank will now pay a 1.9 million euro fine.

    The bank highlighted in Monday’s media release that it’s current approach allows it to analyze the situation and weigh its options in the «best interest of its stakeholders,» which means that the group could still withdraw its appeal.

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  • UBS in Talks With China Life

    UBS in Talks With China Life

    UBS is reportedly in talks with insurance giant China Life to form an asset management joint venture.

    UBS is in discussions with China Life to form an asset management joint venture in the mainland, according to a report citing unnamed sources. The two have signed a memorandum of understanding and a formal launch will be subject to approval from the China Banking and Insurance Regulatory Commission (CBIRC).

    Under the agreed deal, if finalized, UBS will hold a majority stake in the business unit which will make it the first foreign majority-owned asset management joint venture with an insurer since such partnerships were allowed in 2019. The scope of operations at the planned joint venture has also not yet been finalized.

    The move to secure a joint venture with China Life follows failed attempts to form a similar asset management joint venture with a wealth management unit of a Chinese state-owned bank, the report said. «UBS has been keen to take an absolute-controlling status in a China unit, but its competitors are quick to snap up the best local partners,» said one of the unnamed sources.

    UBS currently has exposure in an onshore Chinese asset management business via a 49 percent stake in UBS SDIC Fund Management which has 149 billion yuan ($23.4 billion) in retail fund assets as of November 18.

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  • UBS Faces Tough Decision After Ruling

    UBS Faces Tough Decision After Ruling

    A French court’s ruling over money laundering in France puts UBS in front of a fundamental decision.

    Sometimes it pays to argue. A ruling after the first hearing over the solicitation of wealthy French clients in February 2019, threatened the bank with a record fine of 4.5 billion euros ($5.1 billion) including damages. Yesterday (Monday) an appeals court in Paris reduced this sum to 1.8 billion euros.

    UBS has a few days to decide whether it will accept the ruling or take the case to a high-instance court. The fine, which was cut by 2.7 billion euros, could be a strong incentive for the bank to give in and pay. However, it would also mean the bank admitting to having committed a criminal offense – which could also have consequences in other jurisdictions.

    The sentence that UBS received confirms the verdict from 2019 of illegal client solicitation and money laundering aggravated by tax fraud.

    UBS’ former CEO Sergio Ermotti upheld an uncompromising attitude in previous proceedings. The current CEO Ralph Hamers, however, might have a different view.

    Until now, the bank has always insisted that it had done nothing wrong legally. It rejected the accusation that it deliberately recruited rich customers in order to hide their money from the French tax authorities.

    It also argued that under the 2003 Savings Tax Agreement between the EU and Switzerland, it was not possible to prosecute for money laundering retroactively. A position that was sometimes perceived as arrogant in France.

    UBS softened its tone during the appeal compared to the first trial. Criminal law specialist Hervé Temime took over from Paris-based star lawyer Jean Veil. But this did not change the outcome significantly.

    Management’s duty to its shareholders to avert damages. This is a strong argument for the bank to continue litigating, to avoid a criminal conviction at all costs. It also means that legal costs are likely to pile up.

    The UBS tax case in France involves events that occurred years ago. They were set in motion by statements by former employee Stéphanie Gibaud and her book. Gibaud worked in communications and marketing at UBS in France from 1999 to 2012. In 2014, she published a book titled The woman who really knew too much in reference to the alleged tax fraud practices of the bank.

    The penalty reduction can be seen as a triumph for UBS. Although the verdicts suggest otherwise. The bank also lost an employment law case against the whistleblower Gibaud. The bank withdrew a lawsuit against her and her publisher for defamation. At the European Court of Justice in Strasbourg, UBS was also unsuccessful with a lawsuit against the security deposit of 1.3 billion euros demanded by France.

    In Belgium, UBS was able to settle a tax dispute without admitting guilt. It was ordered to pay a 49 million euro fine and charges of money laundering and of operating a criminal organization were dropped.

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  • UBS Extends Partnership With Private Equity Fintech

    UBS Extends Partnership With Private Equity Fintech

    Switzerland’s largest lender is expanding its partnership with the iCapital Network platform to serve wealthy clients in Switzerland and Asia.

    UBS global wealth management is strengthening its ties to iCapital Network to gain access to the technology company’s data and analytics platform for private markets, according to a statement Thursday.

    Details of the deal were not announced.

    The platform, which automates the lifecycle of private market investments, enables UBS wealth managers to access data related to private equity, private debt, and real assets.

    The two parties, engaged in a strategic partnership since 2017,  expect the appetite for the asset class among high net worth individuals to grow, the statement says.

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  • UBS Joins Hong Kong Covid Quarantine Payers

    UBS Joins Hong Kong Covid Quarantine Payers

    Swiss financial giant UBS is the latest bank to announce reimbursement plans for employees from Hong Kong’s strict 21-day quarantine for travelers.

    For full-time Hong Kong-based employees up to the executive director level, UBS will reimburse up to HK$2,000 ($256) per day to cover quarantine hotel expenses costs to «reunite with immediate family» outside of the city, according to an internal memo.

    The reimbursement can total up to HK$42,000 for a single trip only and is available until November 30 next year, barring an earlier relaxation of restrictions by the Hong Kong government.

    A spokesperson for the bank confirmed the continues of the memo.

    UBS and a number of other global financial institutions have offered financial support to withstand the effects of Hong Kong’s zero-Covid policy.

    At $5,384, UBS has taken a slight lead in single payout for quarantine costs, ahead of Morgan Stanley ($5,128), Goldman Sachs ($5,000), and J.P. Morgan ($5,000).

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  • UBS Asset Management Names Sustainability Head

    UBS Asset Management Names Sustainability Head

    Swiss bank UBS is hiring a sustainable expert for its asset management arm. The experienced banker used to manage the investments of an Australian state.

    UBS asset management is appointing Lucy Thomas as head of sustainable investing, the bank said in an emailed statement.

    Thomas will lead sustainability and impact strategy and report to Barry Gill, head of investments for UBS asset management.

    In her previous role, Thomas was head of investment stewardship at TCorp, the financial markets’ partner of the New South Wales government in Australia. Thomas will move from Sydney to Zurich for the position.

    Thomas brings extensive experience working with clients and leading the integration of sustainability factors into the investment process globally, Gill said in the statement.

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  • UBS Fund Managers to Exit Amid China Property Crisis

    UBS Fund Managers to Exit Amid China Property Crisis

    Another two portfolio managers are leaving the bank after a fund was hit by China’s high-yield bond market slump triggered by China Evergrande’s debt woes.

    Singapore-based Jiayi Yew and Brian Lou in China will leave the bank in January, citing a company spokesperson.

    The pair reported to Ross Dilkes, who is also leaving the company after more than 16 years. Dilkes was the lead manager of the $3 billion Asian High Yield fund, which was established around nine years ago.

    UBS has 26 staff in its emerging market and Asia-Pacific fixed-income team and it is looking to replace the departing managers with four new hires, the spokesperson said.

    Currently, UBS is amongst the top five holders of Evergrande bonds at $274 million as of September 30, according to public data, which includes holdings invested client money like the Asian High Yield fund.

    The fund also has sizeable positions in other troubled developers like Sunac China and Kaisa Group.

    Year-to-date, Dilke’s fund has lost around 18 percent with approximately half of its holdings in real estate.

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  • UBS Names Successor to Chairman Axel Weber

    UBS Names Successor to Chairman Axel Weber

    The Swiss bank’s board is nominating a veteran of Morgan Stanley as chairman. UBS will also elevate a Swiss stalwart as his deputy.

    Zurich-based UBS is nominating Colm Kelleher as its next chairman, it said in a statement on Saturday. The 64-year-old Irishman, who spent most of his career at Morgan Stanley in the U.S., is to replace Axel Weber, who will step down in April when he hits term limits.

    UBS will also propose Lukas Gaehwiler as vice-chairman, it said. The 56-year-old is a former corporate banker who ran the bank in Switzerland until 2017, and now chairs the same domestic unit.

    Kelleher in 2019 left Morgan Stanley, where he had overseen both institutional securities business as well as wealth management. He is battle-tested, having been finance chief and co-head of strategy at the U.S. bank during the 2008/09 financial crisis.

    Gaehwiler is to ensure a Swiss balance in its board, a person familiar with the matter said. The search to replace Weber involved both the outgoing chairman himself as well as CEO Ralph Hamers, UBS said in March.

    Kelleher’s nomination comes one year after that of António Horta-Osório at UBS’ crosstown rival Credit Suisse – and on the same day that Germany’s Deutsche Bank nominated Alex Wynaendts, a former insurance CEO who now sits on Citi’s board, as its new chairman.

    UBS considered candidates such as Roche’s overseer Christoph Franz, Swiss ex-central banker Philipp Hildebrand, and ex-Unicredit boss Jean-Pierre Mustier.

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  • Saxo Bank Taps Another Veteran of UBS

    Saxo Bank Taps Another Veteran of UBS

    The bank’s Swiss arm is enlisting the services of a 37-year veteran of Swiss heavyweight UBS.

    Saxo Bank is adding Claudius Sutter to its board of directors, it said in an emailed statement on Wednesday. Sutter takes over for Tino Gaberthuel, who is not standing for reelection.

    The move is noteworthy because Sutter spent 37 years at UBS’ private bank, including several helping develop Smartwealth, a digital wealth manager the Swiss bank launched in the U.K., then abandoned three years ago.

    Saxo’s Swiss bank is overseen by Andreas Amschwand, also a veteran of UBS. The Swiss banker ran UBS’ foreign exchange operations for nearly 25 years, before leaving for a board seat at Julius Baer and later the chair of Seba, along with Sygnum one of Switzerland’s first crypto banks.

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  • UBS Opens Major New Asian Office

    UBS Opens Major New Asian Office

    The Swiss banking giant’s top two were on hand to open a new office in Singapore – its largest in the wider region.

    Zurich-based UBS officially opened its Singapore office at 9 Penang Road, in a ceremony that featured Chairman Axel Weber, CEO Ralph Hamers, and Asia-Pacific boss Edmund Koh, it said in a statement. The 400,000 square feet of prime property will be the Swiss bank’s largest office in the region.

    Singapore’s finance minister Lawrence Wong was on hand, lauding UBS’ efforts in the city-state with regards to talent development in a LinkedIn post. Fabrice Filliez, Swiss ambassador in Singapore, and Bloomberg founder Michael Bloomberg also attended.

    For UBS, which employs more than 3,000 people in the city-state, the office represents a larger, campus-style, facility. The Swiss wealth manager has also settled into Singapore’s Command House, a historical landmark wher

    UBS’ plans to move out of the financial district into Penang Road raised eyebrows at the time because the latter is not a typical headquarter location for a major bank. However, Penang Road is a stone’s throw from the prime Orchard Road shopping belt and the location offers good connectivity.

    The bank launched two new initiatives to mark the launch: Techconnect SEA, an ecosystem that aims to connect and grow Southeast Asia’s next generation of unicorns, and an app called Circle One which will connect investors to ideas on a global ecosystem.

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  • UBS Officially Opens Singapore Office

    UBS Officially Opens Singapore Office

    Swiss banking giant UBS has opened its largest Asia Pacific office in Singapore, alongside the announcement of two new tech-related initiatives.

    UBS officially opened its Singapore office at 9 Penang Road yesterday in a ceremony that featured chairman Axel Weber, global chief executive Ralph Hamers, APAC CEO Edmund Koh and more.

    Fully running on renewable energy, the 400,000 square feet of the prime property will be the Swiss bank’s largest office in the Asia Pacific region.

    Accompanying the office launch was the introduction of two new tech initiatives: TechConnect SEA and UBS Circle One.

    TechConnect SEA is an ecosystem that aims to connect and grow Southeast Asia’s next generation of unicorns.

    The bank is also piloting its UBS Circle One app which will connect investors to ideas on a global ecosystem.

    Also in attendance at the event was Singapore’s Minister of Finance Lawrence Wong who lauded UBS’ efforts in the city-state especially with regards to talent development.

    UBS has come a long way, starting out with a handful of professionals in 1970 and growing to employ over 3,000 staff in the Wealth Management, Investment Banking and Asset Management businesses today, Wong said on a social media post.

    It has remained committed to building up Singapore’s local talent pool, while deepening the capabilities and expertise of the industry in meaningful areas such as innovation, philanthropy, and sustainable investing.

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