UBS Group CEO Sergio Ermotti mentioned the financial institution will give traders a top level view of its progress technique early subsequent 12 months and signaled the course of plans to develop within the U.S., because the lender strikes ahead with its merger with Credit score Suisse.
The Swiss lender is working at “full velocity” on the fusion of the 2 banks, together with on discovering greater than $10 billion in price financial savings, Ermotti mentioned at an occasion in London on Tuesday. UBS is “additionally making ready the three-year plan that we are going to announce in February,” he mentioned.
The announcement of a strategic replace is an early signal that UBS is starting to suppose past the duty of integrating its former rival, which was rescued with authorities backing after it got here near collapse in March. Though a few of Credit score Suisse’s companies in Asia and Latin America give UBS a right away inrease in dimension, it is much less clear how the wealth administration large will search to develop on the planet’s largest financial system.
“Within the U.S., I believe it is crucial to take a look at the combination of the funding financial institution and the way these capabilities will permit us to provide our consumer advisors — monetary advisors — within the U.S. much more alternatives to assist shoppers to monetize or undergo an M&A transaction for their very own companies,” Ermotti mentioned. “We now have lastly essential mass within the U.S. by way of bankers and likewise we take a look at methods to diversify income streams in our wealth administration enterprise within the U.S.”
Half of the financial savings deliberate for the merger will come from winding down infrastructure and IT associated to Credit score Suisse’s loss-making funding financial institution and from the exit of legacy companies that UBS does not see as suitable with its technique, Ermotti mentioned.
“We put as a precedence the non-core legacy cost-reduction and the rundown of the danger weighted property,” Ermotti mentioned. “The worth creation from a shareholder perspective, it is by the decommissioning of the IT and infrastructure that helps all these property.”
UBS mentioned final month that the so-called non-core unit consisted of about $55 billion of risk-weighted property as of the tip of June, together with some $17 billion from Credit score Suisse’s funding financial institution. The financial institution mentioned then that it could shut down about two-thirds of the funding financial institution, signaling that the enterprise can be topic to lots of the coming job cuts.
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Ermotti mentioned that the so-called non-core unit consists of predominantly “good” property which have to be fastidiously disposed of.
“There is no such thing as a poisonous form of profile round them,” Ermotti mentioned. “So we have to actually measure what’s the finest financial consequence for shareholders as a result of if we go too quick, with out having the ability to decommission, we could destroy worth.”