UBS has hinted at a return to the Australian wealth management industry via its $4.8 billion acquisition of Swiss competitor Credit Suisse.
According to reports, UBS would leverage Credit Suisse’s private banking arm to reassert itself in the Australian market.
“Wealth management is core to UBS, representing our largest business globally,” Nick Hughes, joint country head and chief operating officer at UBS Australasia, said.
“We recognise the quality and long-term success of Credit Suisse’s Australian private bank, and we look forward to building on that success.”
Michael Marr, head of wealth management Australia and New Zealand, welcomed the opportunity to “build on the success” of Credit Suisse Wealth Management in Australia.
“Our shared commitment is to ensure a smooth transition for our team and our clients,” he said.
“Our focus, as always, is the provision of quality advice and investment solutions for our clients.”
A prospective UBS return to the wealth management space would come almost eight years after the firm exited the Australian market.
The reports come just weeks after UBS moved to fully acquire its distressed peer in what was described by UBS chief executive officer Ralph Hamers as an “emergency rescue”.
Credit Suisse struggled to rebuild investor confidence following a sharp surge in fund outflows in the back-end of the 2022 calendar year.
As part of the “all-share” transaction, Credit Suisse shareholders have been offered one UBS share for every 22.48 Credit Suisse shares, representing approximately CHF 0.76 (AU$1.22) per share for a total consideration of CHF 3 billion (AU$4.8 billion).
The deal is not subject to shareholder approval, with UBS securing a pre-agreement from Swiss regulators to accelerate the acquisition.
Once finalised, the acquisition would involve “managing down” Credit Suisse’s investment bank while reinforcing UBS’s global investment strategy, with the combined investment business to account for approximately 25 per cent of group risk-weighted assets.
Together, the businesses are tipped to manage over AU$5 trillion in invested assets across global markets, of which, approximately AU$2.2 trillion would be invested in Europe.
The combined business is projected to generate annual run-rate of cost reductions exceeding AU$11.9 billion by 2027.
Credit Suisse chair re-elected by thin majority
Credit Suisse has held its first annual general meeting since the announcement of the UBS acquisition, during which Axel P Lehmann was re-elected as chair with 55.7 per cent of the votes from shareholders.
However, five members of the board opted not to stand for re-election, with all other shareholders re-elected for a further term until the closing of the planned merger with UBS.
Shareholders also approved a proposal on appropriation of retained earnings and received strong support from shareholders with 79.8 per cent voting in favour, and greenlit the proposed (50.4 per cent) maximum aggregate compensation of the board for the period of one term.
However, shareholders rejected the proposed maximum aggregate compensation of the executive board for the period of one term, reflecting broader shareholder discontent with the leadership team’s management of the Swiss banking giant.
