UBS, a major bank, is concentrating on growth and expanding its business with wealthy Americans to increase profitability and size. The bank gained experience in US asset management during Sergio Ermotti’s first term in office. Instead of focusing on potential regulatory challenges, Ermotti is focusing on growth, aiming to integrate CS and cut costs while establishing the major bank as a global asset manager. The goal is for UBS to manage $5 trillion in invested assets in the coming years, compared to the current $3.9 trillion.
The US market presents challenges for UBS, as profitability in asset management is lower compared to other regions. Despite efforts to improve, UBS’s pre-tax profit in US asset management declined in the last quarter of 2023. The bank faces high operating costs in the US, where Wealth Management struggles compared to operations in Switzerland and Asia. While the US market offers considerable potential due to the concentration of wealthy individuals, UBS has historically faced difficulties in this region.
UBS has tried various strategies to address these challenges, including changing its brokerage model to attract and retain customers. The bank aims to make lending to wealthy clients more appealing by increasing its deposit base and offering new incentives to financial advisors. UBS acknowledges the need for improvement in its US operations and is working on revitalizing its business in the region.
Despite being relatively modest compared to competitors’ assets under management in the US market, UBS sees potential for growth in this region. The bank is focusing on operational improvements and strategic initiatives to strengthen its position and attract new customers as it navigates the challenges presented by this market.
In conclusion, while there are challenges present for UBS’s expansion into wealth management services aimed at Americans, there remains significant opportunities for growth if executed effectively through strategic initiatives and operational improvements.
