UBS Group to Revamp Unit for Ultra-High Net Worth Clients

Iqbal Khan, who joined UBS Group AG UBS in October 2019, is planning to revamp the company’s ultra-high net worth business led by Joseph Stadler. This move shows that in just less than three months of joining the company, Khan is already trying to make his mark in the biggest wealth management firm.

According to people with knowledge of the matter, Khan, along with Tom Naratil, the co-head of UBS Groups’ wealth management unit, is planning to wind down the Swiss bank’s dedicated unit for the ultra-wealthy clients and establish a new unit for the rich wealth-management clients, who also require investment banking services.

The new unit will likely be led by Stadler and include UBS Group’s Global Family Office, which is a joint venture between the company’s wealth management and securities unit.

Notably, the ultra-rich clients, who do not require investment banking services, will likely be shifted into the existing regional divisions according to the people with knowledge of the matter.

Moreover, in an effort to boost lending to rich clients, the company plans to book profits and risks from lending in the wealth management business. The investment banking unit will then be given a fixed fee for only managing the risk.

The main aim of this reorganization is to speed up the process of executing transactions. With the new unit, the time-consuming negotiations between wealth managers and the investment bank will be eliminated, which, in turn will accelerate the process of loan approvals.

Another key motive is to help the bank do more business with each client because according to people with knowledge of the matter, the speed of wealth creation is expected to slow down.

However, UBS Group did not make any comments on the changes.

Our Take

Along with gradual execution of its growth strategy, UBS Group remains focused on achieving the performance targets. The company’s efficiency programs are expected to free up resources to make investments to support growth and enable it to service clients with greater dexterity, improving quality and speed to market.

Shares of the company have gained merely 0.6% so far this year, underperforming 6.9% growth recorded by the industry.

Currently, UBS Group carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

A few other top-ranked stocks from the same space are KB Financial Group Inc. KB, Banco Macro S.A. BMA and Barclays PLC BCS.

KB Financial has witnessed an upward earnings estimate revision of 3.5% for the current year, over the past 30 days. Its share price has increased 13.7% in the past three months. The company currently sports a Zacks Rank #1.

Banco Macro’s earnings estimates for 2019 have been revised 6.1% upward over the past 30 days. Its shares have gained 25.9% in the past three months. It also flaunts a Zacks Rank #1, currently.

Barclays carries a Zacks Rank #2, at present. The company’s earnings estimate for the ongoing year has remained unrevised over the past 30 days. Its share price has appreciated 37.8% over the past three months.

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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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