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UBS overhauls European wealth business, revamps management

Monday, July 3, 2017 - 23:39

[ZURICH] UBS Group AG is consolidating its wealth management business in Europe and emerging markets to streamline operations, expanding the role of top executives in much of the region.

The new structure will leave UBS with just three booking hubs for its cross-border business - Switzerland, Germany, and the UK - down from about 10 at present, Paul Raphael, head of wealth management for the region, said in a memo to employees Monday. European onshore businesses will be integrated in the new continental hub in Frankfurt.

Starting in Germany, the UK, Italy and Spain - four of the Swiss bank's biggest markets - cross-border operations will be combined with the domestic business, according to the memo, seen by Bloomberg and confirmed by the bank. Thomas Rodermann, head of the German business, will now also oversee teams serving German residents from Switzerland as well as operations in Luxembourg, Austria and the Nordic countries.

"Converging client needs and regulatory trends across EEM represent a unique opportunity to better align ourselves to serve our clients," Mr Raphael told employees. "The 'One Market' approach will allow the whole wealth management organization to improve the strategy for the respective markets." Daniel Regli, an analyst at MainFirst with an outperform rating on the stock, said the new set-up makes sense and may be an opportunity to cut some costs without compromising on revenue.

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Wealth managers are under pressure from record-low interest rates and reticence among clients to put their cash to work in investments because of market uncertainty. UBS is encouraging investors to look beyond their home countries for opportunities, tapping into what it says is a growing desire for diversification.

At the same time, banks are preparing for new European Union rules that will require them to be more transparent about their operations. The so-called Mifid II regulations come into force next year, coinciding with the start of a Swiss agreement to turn over information on foreign bank accounts to tax authorities in other countries.

"Since countries need to exchange tax data anyway, it doesn't really matter where the assets are booked," Mr Regli said. "'Combining these operations eliminates double functions which manage the same client segment." Raphael is responsible for Europe and emerging markets outside of Asia-Pacific - a region accounting for about 24 per cent of client assets managed by UBS, or about 523 billion francs (S$750.4 billion), at the end of March. His unit posted the second-biggest growth of invested assets in the first quarter Bigger Roles UBS late last year merged its European wealth management operations into UBS Europe SE, a new subsidiary in Frankfurt that already covers operations in eight European countries. It now wants to add all European onshore businesses to the integration, the memo said.

Among managers taking on bigger roles, Fabio Innocenzi, who heads up Italy and Spain, will now be responsible for onshore and offshore businesses in both markets. Pablo Diaz will continue to manage the domestic business in Spain, where he will be in charge of implementing the new approach.

In the UK, Jamie Broderick will become responsible for both onshore and offshore businesses and will be in charge of setting up a desk in Switzerland to better serve UK clients across booking centres. As Mr Broderick is retiring at the end of the year, Eva Lindholm will take over as head of the UK wealth management business in October.

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