The unit is said to struggle to hit profitability and margin targets.
The New York Post reports that one of Wall Street’s most persistent rumours, says Alois Pirker, a widely respected analyst at the Aite Group, is that UBS’ Americas unit could go on the block this time. And he’s skeptical of his former employer’s commitment to wealth management, despite its recent tech investments, adviser compensation sweetener and a management shake-up.
Pirker, who once worked in London and Switzerland for the bank, says UBS has “no interest in brokerage.” UBS Wealth Management Americas (WMA) is really a grand “marketing outlet” beset with moneymaking and profitability challenges, he said.
US clients are, in a sense, more of a “liability,” he told The Post in a veiled reference to past tax-avoidance trouble for UBS.
UBS CEO Sergio Ermotti, however, said during a recent quarterly results broadcast:
'Wealth Management Americas delivered record total operating income and recurring net fee income, and so gross lending rise by 4% compared to the prior quarter. The pre-tax profit of $231 million, however, was affected by various increased provisions. This business, with the most productive advisor in the industry and the largest market in the world – in the largest market in the world, and as part of the leading Wealth Management franchise globally is critical to our strategy and to our growth prospects. Let me also remind you that almost every dollar we earn in pre-tax profit across our businesses in U.S. is available to distribute to shareholders, as we continue to utilize deferred tax assets.
So it's not so hard to see why this strong business with its strategic and financial importance looks attractive to our competitors, but it's worth even more to UBS and its shareholders, and that's why it's not for sale'.
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