UBS considers acquisitions to expand wealth management in Europe

[March 02, 2016]  By Joshua Franklin and Angelika Gruber

ZURICH (Reuters) - UBS may consider making acquisitions to boost its European wealth management business to take market share from rivals, its private banking head for Europe told Reuters.

"There are certain markets that we focus on, certain markets where we're prepared to think about inorganic growth," Jakob Stott, the head of UBS's wealth management businesses in Europe, said in an interview. "There are more consolidation opportunities when you have fragmented dynamics."

Stott's talk of Europe as a growth market stands out from the usual private banking industry chatter about booming wealth in Asia Pacific, where UBS is the biggest private bank and others are looking to expand, in particular Swiss rival Credit Suisse.

UBS, the world's biggest private bank, sees growth potential in Europe because the wealth management market is still very fragmented with the biggest banks rarely holding more than a 7 percent share in a particular country.

And the timing could be right because some of UBS's rivals are preoccupied with restructuring their businesses.

"We now have an opportunity to accelerate revenue and profit growth ... there are other banks that are distracted for many reasons," Stott said

He did not mention them directly but Credit Suisse and other European heavyweights Deutsche Bank and Barclays have new bosses who are revamping the banks' business models.

Stott said UBS's purchase last year of Santander's private banking business in Italy, which managed 2.7 billion euros ($2.9 billion), was the kind of deal UBS could look to do.

At the end of 2015, UBS had 343 billion Swiss francs ($343.8 billion) in invested assets in Europe, excluding Switzerland. In Asia Pacific, the bank had 272 billion francs.

Stott did not give a growth target for the European business but said UBS expects to grow "at a multiple of the market".

BREXIT OR NO BREXIT

Stott also said Britain would remain an important market for UBS regardless of the outcome of a referendum in June on the country's membership of the European Union.

"We can have a great business there irrespective of Brexit," Stott said. "There's still a substantial asset pool there and a substantial number of wealthy clients who need access to wealth management services."

Closer to home Stott sees signs of a recovery in its private banking operations for European clients in Switzerland, a business that has been overshadowed by an international clamp-down on tax avoidance that chipped away at Switzerland's bank secrecy rules.

"We are now at or close to an inflection point," Stott said, "where you start seeing some potential revenue growth and asset growth again."

($1 = 0.9190 euros)

($1 = 0.9978 Swiss francs)

(Editing by Jane Merriman)

[© 2016 Thomson Reuters. All rights reserved.]

Copyright 2016 Reuters. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.