Due Diligence
UBS Trading Loss May Boost Standing of Wealth Management Division

UBS Trading Loss May Boost Standing of Wealth Management Division

UBSA Bloomberg story from today says that the $2.3 billion trading loss recently sustained by UBS' investment bank could boost the standing of the wealth management division inside UBS. The Swiss institution may have to spin off its investment bank and refocus on the wealth management division, even hiring a CEO with a wealth management division, analysts told Bloomberg. Wait, what about Sallie Krawcheck!!? Oh right, she's in the US, not Switzerland. Too bad.

Now may be the time to rebuild UBS around its private banking business, said Beat Wittmann, head of Zurich-based Dynapartners and former chief of investment products at Julius Baer Group AG. Spinning off the investment bank or devoting it to supporting the wealth-management business could boost the shares by as much as 50 percent, he said.

The story also mentions details of a memo we wrote about Monday.

The full Bloomberg story is here.

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