Monday, April 15, 2024

UBS Has Higher Enterprise Combine Than Morgan Stanley, JPMorgan Says


(Bloomberg) — UBS Group AG’s extra diversified wealth administration publicity and enterprise combine makes it extra engaging than US peer Morgan Stanley, in line with analysts at JPMorgan Chase & Co. 

Whereas each companies are forecast to generate about 60% of earnings from asset-gathering companies in 2027, JPMorgan analyst Kian Abouhossein stated the Swiss financial institution has a greater wealth administration franchise than Morgan Stanley exterior of the US. It’s helped by being extremely geared to Asia, which is seen because the “candy spot.” 

As well as, UBS has a home Swiss Financial institution which is successfully a money cow and an funding financial institution consuming not more than 25% of group risk-weighted belongings, versus 50% at Morgan Stanley.

“UBS in our view has a greater enterprise combine than Morgan Stanley,” Abouhossein stated in a observe on Friday. 

The Swiss financial institution is already the undisputed high wealth supervisor in lots of elements of the world, however not within the US, the most important marketplace for wealth administration companies. Chief Government Officer Sergio Ermotti has signaled that the US will probably be a serious plank of its development technique. 

The financial institution is vying for primacy in international wealth administration, looking for to increase its valuation to a par with US rivals. UBS Chairman Colm Kelleher – who previously served as president of Morgan Stanley – has stated that he thinks UBS needs to be valued as extremely as a few of its US friends.  

Credit score Suisse 

UBS has been making fast progress on integrating Credit score Suisse because it agreed to purchase the smaller rival in an emergency takeover a 12 months in the past. However nonetheless the acquisition comes with a raft of potential difficulties from closing out positions to managing authorized liabilities. 

“Going ahead, we don’t anticipate UBS’ valuation low cost versus Morgan Stanley to shut, however consider it might slender,” the JPMorgan analysts stated within the observe. Drivers for this embody the earnings advantages of the Credit score Suisse acquisition and the potential for increased capital returns.

Learn Extra: UBS Alerts Most of Credit score Suisse Funding Financial institution to ShutErmotti Says UBS Catch-Up on US Wealth Market Will Take Time

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