UBS chair guidelines out extra US acquisitions after aborted Wealthfront deal

UBS chair Colm Kelleher has dominated out additional acquisitions within the US after strolling away from a $1.4bn deal two months in the past, saying that shareholders want a transparent image of how the Swiss financial institution will develop in a promote it has earmarked as a high precedence.

The Swiss financial institution in September ditched plans to purchase US digital advisory start-up Wealthfront, a deal that had been championed by chief govt Ralph Hamers, however proved unpopular with traders.

“The actual short-term acquire for us is the states. There was some tweaking [of strategy], we all know we have to develop, UBS is subscale within the US,” Kelleher informed the Monetary Occasions world banking summit in London on Wednesday.

“What makes UBS completely different from Morgan Stanley or Financial institution of America is that we enchantment to the ultra-wealthy. The message within the states is natural development, no optionality, no distractions, no M&A,” Kelleher added. “We have now a transparent technique within the states. Why are we complicating it for our traders?”

Former Morgan Stanley govt Kelleher joined UBS in April with a short to assist broaden the enterprise and enhance the financial institution’s valuation.

“There isn’t any prospect of UBS rising inorganically within the states . . . we’ve got appeared on the numerous properties within the states the place we might scale up, they don’t match our standards or tradition, so we’ve got decided to develop organically,” he added.

“The place we deliver worth is excessive web value and ultra-high web value. I don’t assume we notably deliver alpha in mass-affluent, which is why we walked away mutually from the Wealthfront deal . . . it didn’t make sense,” mentioned Kelleher.

In a wide-ranging interview, Kelleher additionally denied rumours that he had fallen out with Hamers over technique and elegance.

“I actually don’t get this . . . I used to be 32 years at Morgan Stanley, and in all that point we by no means had something just like the blogs and gossip that comes out of Zurich,” he mentioned. “There was a sense in UBS I’d be some Wall Road shoot-from-the-hip sort man and Ralph and I’d conflict. We truly get on phenomenally nicely. We’re very complementary. Banking isn’t about persona, it’s about match.”

Kelleher has taken Hamers on a sequence of investor roadshows, with the goal of engaging US fund managers to turn out to be shareholders and lift the group’s price-to-book ratio, which lags behind US opponents resembling JPMorgan and his former employer.

UBS’s primary rival Credit score Suisse has gone by way of a number of chaotic, scandal-ridden years and lately introduced that shoppers had withdrawn SFr84bn ($89bn) of property. Credit score Suisse’s shares hit a 30-year low this week.

“We aren’t actively benefiting at their expense. We view them as a worthy competitor going by way of a disaster,” mentioned Kelleher. “However clearly we’re additionally in a world of shoppers shifting cash round, so the place shoppers proactively strategy us we both let the cash come to us or we let it go to our American opponents.”

Kelleher lately attracted controversy at an funding convention in Hong Kong the place he mentioned world bankers had been all “very pro-China”.

The UBS chair was considered one of a number of heads of worldwide banks who spoke on the occasion this month, the place Chinese language officers had sought to woo rattled worldwide traders.

In a joking response to feedback made earlier within the day by a Chinese language regulator about worldwide media’s notion of the nation, Kelleher mentioned: “We’re not studying the American press, we truly purchase the [China] story.”

On Wednesday, he reiterated his optimism in regards to the nation, regardless of the anti-government protests which have sprung up in quite a few cities. “We’re assured that 2023 will probably be a 12 months the place you’re going to get some rest on zero-Covid and the market will chill into gear and we’re seeing that with the build-up of liquidity with our clients.”

He mentioned rich shoppers at UBS had been holding more money than at any time for the reason that monetary disaster of 2008.

“[On] The US I’m not as unfavorable as some . . . I’m comparatively constrictive on the [Federal Reserve], we may have a shallow recession, the Fed is getting management of inflation . . . Charges will keep increased for longer . . . however however it doesn’t presage the doom-laden situations that we’ve got seen. 2023 you will note cash going again to work”

UBS has been one of many strongest European banks lately, as its rich shopper base’s portfolios swelled on the again of central financial institution interventions in the course of the pandemic.

Nonetheless, Kelleher was much less constructive on Europe, saying that Brexit and the stalling of the EU banking union venture meant lending could be prone to decelerate dramatically in a recession.

“I believe Europe goes to be comparatively sterile floor for the longer term,” he concluded.