Citi Could Move On Up, UBS Settles and Said To Mull Assets Deal

UBS Fractured

Shares in Citigroup could increase by about 33% in 12 months as the firm reduces unwanted assets and management cuts costs, according to Brennan Hawken, an analyst at UBS.

Bloomberg reports that the stock may rise as the New York-based lender reduces the amount of money it holds against distressed assets in the Citi Holdings division while losses from the unit also decline, Hawken wrote in a note to clients, upgrading his rating to buy from neutral. Shares could increase to $62 within a year, Hawken said.

In the meantime, Bloomberg also reports that HSH Nordbank, the German regional lender, has settled a lawsuit it filed against UBS over losses on a collateralized debt obligation linked to the U.S. subprime-mortgage market.

HSH Nordbank, based in Hamburg, sued UBS in February 2008 over losses on a CDO called North Street 2002-4. HSH Nordbank said in the suit that its predecessor, Landesbank Schleswig- Holstein, lost almost all of the $500m it invested in the CDO in March 2002.

The two sides have reached a settlement, the terms of which are confidential.

Finally, Reuters reports that UBS is in talks with Italy's Veneto Banca over the possible purchase of certain assets of hard-pressed asset manager Banca Intermobiliare, a source with direct knowledge of the situation told the news agency.

Veneto Banca, which owns 71% of Banca Intermobiliare, said in a statement it was looking at ways 'to extract more value from the private banking division of Banca Intermobiliare', and was considering involving third parties in the process.

Citigroup Could Jump 33% as Unwanted Assets Decline, Hawken Says

HSH Nordbank Settles 2008 CDO Suit in N.Y. Against UBS

UBS mulling partial purchase of Intermobiliare - source

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