Under CEO Ralph Hamers, UBS wanted to get into the business with wealthy Americans. Chairman Colm Kelleher lays out where the focus is now.
At a banking summit in London yesterday, UBS Chairman Colm Kelleher definitively rejected the push into business in the US with affluent Americans
Where there is Alpha
«I don’t think we bring alpha in mass affluent, that’s why we had to walk away mutually from the Wealthfront deal. Because things have changed and it didn’t make sense,» according to a «Bloomberg» (behind paywall) story quoting the former Morgan Stanley banker.
In September, UBS spiked its multi-billion dollar acquisition of the digital platform Wealthfront, which reaches thousands of mainly younger wealthy clients Americans. Now, Switzerland's largest overseas bank wants to refocus on its traditional business with the one percent. Kelleher sees alpha in the business with rich and super-rich US citizens, rather than with the merely wealthy.
Embarrassing Palace Intrigue
The UBS Chairman is convinced the institution needs to grow in the United States. «We have to grow in the States, as UBS is sub-scale there,» said. Not mentioned was the fact the Americas business also generates the highest costs of all UBS divisions.
There is a need for action, especially if Kelleher is personally involved in getting Wall Street to perceive the Swiss bank as a major international bank and have a higher market value.
The media often portrays the Wealthfront exit as a power struggle between bank CEO Ralph Hamers and Kelleher. Hamers, the fintech-savvy CEO, engineered the deal, while the new chairman pulled the plug on the acquisition.
