Zurich runs Ubs, evaluates move to US with possible shopping spree
Supporting the share price is the confirmation of the buy recommendation by Jefferies analysts, with a price target of CHF 37.
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(Il Sole 24 Ore Radiocor) - Positive start to the week for Ubs Group Ag on the Zurich Stock Exchange. The stock of the Swiss banking giant gained one and a half points to just under CHF 33, the best-performing Smi index. Supporting the share price is the confirmation of the buy recommendation by analysts at Jefferies, with a price target of CHF 37. In the spotlight, on the other hand, is an article in the New York Post at the weekend that Ubs is considering the possibility of moving its headquarters to the United States in reaction to the Swiss government's proposals on new capital requirements.
According to the US newspaper, which cites sources familiar with the matter, senior Ubs executives have met with Trump administration officials to prepare a change in strategy, with the move overseas likely to include the acquisition of a US bank or a merger. According to the NY Post, the Swiss bank is considering this option in response to new capital requirements imposed by Swiss regulators to prevent a banking crisis like that of Credit Suisse, which merged with Ubs in a bailout orchestrated by Swiss authorities. The new rules, proposed in June, would require the bank to strengthen its capital base by $26 billion, which Ubs said would hurt its global competitiveness. At the same time, the bank is reportedly in talks with Swiss regulators to try to relax these requirements.
No direct comment from Ubs on what the US newspaper reports for now. The bank referred to statements made by CEO Sergio Ermotti on 11 September to Bloomberg TV. Ermotti said the bank wants to "continue to operate as a successful global bank headquartered in Switzerland. We believe we can offer a lot to our Swiss and international clients in this way. We also believe that this will benefit the Swiss economy'. The CEO added that 'it is clearly too early to comment on possible scenarios or our answers. Of course, the proposed requirements are very onerous and excessive and we will therefore have to consider how best to protect the interests of our shareholders and stakeholders'. Already in July, rumours had circulated about a possible relocation of UBS's headquarters out of Switzerland due to the new rules. One source had cited London as the preferred alternative.
