UBS unveils planned merger of its global and Americas wealth management operations

Switzerland’s UBS will combine its Wealth Management Americas business with its international wealth management business to create a single, “unified” Global Wealth Management operation, the banking group said today.

In a statement, UBS said that the decision to combine the two operations into a single entity was “the natural next step in the evolution of the wealth management franchise”, and that it followed a move begun two years ago to begin to “more closely align” the two divisions.

Martin Blessing, president of UBS Wealth Management, and Tom Naratil, president of UBS Wealth Management Americas, will head up the new Global Wealth Management division as co-presidents, UBS said.

The company revealed the planned merger of its wealth management business alongside its Q4 and full-year 2017 results statement, which was also accompanied by the announcement of a CHF2bn (US$2.04bn, £744m) share buy-back programme.

UBS also announced that it would write off around CHF2.9bn as a consequence of the recent US tax reform legislation, joining other non-US banks that have also been hit hard in their fourth-quarter results by Trump’s so-called Tax Cuts and Jobs Act.

‘Regional variations’ to be ‘maintained’

In announcing the merger of its wealth management businesses, UBS said it would maintain what it called “regional variations in the client service model” on offer, an apparent reference to the significant differences that exist between American and non-American clients as a result of the way the US taxes its citizens, which results in their requiring products and advice designed for specifically for them.

Alongside these regionally-varied client-service businesses, though, “middle- and back-office functions will be more closely aligned and integrated”, UBS said.

It said it will report the first results for the combined wealth management businesses for the first quarter of 2018, and provide an update on the GWM operation’s progress “around the end of March”.

“In the last few years, we transformed our wealth management businesses, adapting to a new paradigm while adding CHF1.0bn in adjusted profits since 2011,” UBS group chief executive Sergio P Ermotti said in a statement accompanying the results today.

“Two years ago, we began to more closely align the divisions, and today’s announcement reflects our continued evolution.

“It will mean improved efficiency, more sharing of best practices, greater returns on our investments and enhanced client service.”

Last June, as part of its revamping of its wealth management business, UBS said it had agreed to sell its domestic wealth management activities in the Netherlands to Van Lanschot Kempen, an arm of a Euronext Amsterdam-listed banking group that dates back to the 1700s.

As reported, Van Lanschot Kempen was said to have agreed to pay an initial acquisition price of €28m for the business.

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