By Patrick Winters
(Bloomberg) --UBS Group AG plans to pursue acquisitions of wealth management assets more aggressively after gaining greater clarity from global regulators on how much capital the bank will need over coming years, according to people with knowledge of the matter.
The Zurich-based company is now keen to purchase targets with portfolios of at least 10 billion Swiss francs ($10.6 billion), said people briefed on the bank’s plans, asking not to be identified because talks are private. The lender has told analysts it has financial room for deals and other investments after guiding conservatively on how much it will spend to buy back shares, two of the people said.
UBS, which oversees 2.3 trillion francs of assets for wealthy clients, is pursuing modest growth through acquisitions once again after shrinking in the financial crisis. More purchases would allow Chief Executive Officer Sergio Ermotti to boost growth after years of trimming assets and risk.
Ermotti plans to return up to 2 billion Swiss francs to shareholders in its first buybacks in a decade after the Basel IV rules on capital were announced in December. The recent acquisition of Nordea’s private banking business in Luxembourg fits the mould of future deals the bank plans to pursue, one of the people said.
The bank declined to comment on potential acquisitions.
December’s Basel IV compromise was a "positive outcome" for European banks, Deutsche Bank analyst Kinner Lakhani wrote in a note to clients on Wednesday. Europe’s banks will in future have greater funds available, including for M&A, he wrote.
UBS has brought the operations making up the bulk of pretax profit into a combined business known as Global Wealth Management to better compete with Bank of America Corp and Morgan Stanley, which closely rival UBS in assets under management, according to a ranking from the Scorpio Partnership.
To be sure, UBS has completed some smaller deals. It agreed to buy a majority stake in Consenso Investimentos Ltda., Brazil’s biggest independent multi-family office with around $6 billion in assets under management in May.
--With assistance from Jan-Henrik Förster.To contact the reporter on this story: Patrick Winters in Zurich at [email protected] To contact the editors responsible for this story: Dale Crofts at [email protected] Jon Menon