UBS Group Considers Partial Sell of Asset Management Division

UBS Group AG UBS is planning to divest part of its asset management division focused on real estate investments. The business area under review includes mainly Swiss real estate assets and can be worth less than $1 billion.This news was first reported by Reuters, citing people with knowledge of the matter. In June 2024, UBS Group revamped its asset management business and moved some of its real estate assets into a new unit wherein it is bringing together asset management and wealth products. Real estate investments left outside of the new unit are being considered for sale, per Reuters.Rationale Behind UBS’ PlansUBS Group’s plans to consider selling part of its asset management division come on the heels of the company’s plans to revamp its smallest business unit.In February, chief financial officer Todd Tuckner told analysts, without elaborating further, that the bank is considering "exits of non-strategic businesses" to improve the profitability of the asset management unit.UBS's asset management division contributed 6.5% to the bank's total revenues in 2024. It is overshadowed by the bank's wealth management division, which generates more than half of the group's total revenues.A spokesperson for UBS said the bank has substantial growth ambitions for its asset management division. "Asset Management is investing in its differentiated and scalable real asset capabilities, including its leading Swiss Real Estate business," the spokesperson added.Our Take on UBS Group’s Restructuring EffortsThis decision to sell part of the asset management unit aligns with UBS’ overall strategy of streamlining its operations, focusing on its core functions following the acquisition of Credit Suisse in 2023. Since then, UBS has been integrating businesses of Credit Suisse and disposing of unwanted assets.UBS’ restructuring plan suggests that it might wind down its Non-Core and Legacy portfolio, releasing more than $6 billion in capital by the end of 2026. Also, UBS Group is progressing well with Credit Suisse integration plans.In the fourth quarter of 2024, the company completed the migration of its Global Wealth Management client accounts in Luxembourg, Hong Kong, Singapore and Japan to UBS platforms.With the successful migration of wealth management client accounts across booking centers in Hong Kong, Singapore, Japan and Luxembourg, UBS Group has now transferred more than 90% of client accounts outside of Switzerland onto UBS platforms. The company expects the Swiss business migrations to commence in the second quarter of 2025. Through these efforts, the company aims to reach gross cost reductions of $13 billion by 2026-end compared with the 2022 reported level. Since the end of 2022, the company has achieved $7.5 billion or around 58% of total targeted cost savings.UBS’ Price Performance & Zacks RankShares of the company have gained 11.2% in the past six months compared with the industry’s growth of 11%. Image Source: Zacks Investment Research Currently, UBS Group carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.Restructuring Efforts By Other Foreign BanksBarclays BCS completed the sale of its German consumer finance business, Consumer Bank Europe, to BAWAG P.S.K., a subsidiary of Austria-based BAWAG Group AG. This move aligns with the company’s plan to streamline its operations as outlined in its Investor Update in February 2024.This sale is part of BCS’ broader strategy to exit retail banking in Europe, responding to shifts in consumer behavior post-pandemic. In addition to the German sale, Barclays has announced plans to enhance digital banking services in the U.K., and expand its corporate and investment banking presence globally, including new ventures in Asia.Another U.K.-based lender, HSBC Holdings HSBC, is actively restructuring its operations in Germany to focus more on its growth strategy in Asia. In sync with this, in September 2024, the company signed an agreement to sell its private banking business in Germany to BNP Paribas. The deal's financial terms, expected to close in the third quarter of 2025, have not been disclosed.The transaction, subject to relevant regulatory approvals, is projected to result in a gain on sale for HSBC. It will help simplify the company’s business model and enable it to focus on the global “wholesale banking business.”Zacks' Research Chief Names "Stock Most Likely to Double"Our team of experts has just released the 5 stocks with the greatest probability of gaining +100% or more in the coming months. Of those 5, Director of Research Sheraz Mian highlights the one stock set to climb highest.This top pick is among the most innovative financial firms. With a fast-growing customer base (already 50+ million) and a diverse set of cutting edge solutions, this stock is poised for big gains. Of course, all our elite picks aren’t winners but this one could far surpass earlier Zacks’ Stocks Set to Double like Nano-X Imaging which shot up +129.6% in little more than 9 months.Free: See Our Top Stock And 4 Runners UpWant the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report Barclays PLC (BCS): Free Stock Analysis Report UBS Group AG (UBS): Free Stock Analysis Report HSBC Holdings plc (HSBC): Free Stock Analysis ReportThis article originally published on Zacks Investment Research (zacks.com).Zacks Investment ResearchWeiter zum vollständigen Artikel bei Zacks Weiter zum vollständigen Artikel bei Zacks