The board of UBS, the world’s largest wealth manager, is said to be frustrated that it has a valuation that is less than those on Wall Street because of perceived negative views of Swiss and European banks. To address that, new board chairman Colm Kelleher and CEO Ralph Hamers have held a series of meetings with influential U.S. fund managers in recent months to persuade them to increase their stakes in the bank.
Kelleher, a 30-year Morgan Stanley veteran, became chairman earlier this year in what many viewed as a surprise announcement. His selection becomes obvious. He won the post over European candidates including Roche’s Christoph Franz, former SNB headPhilipp Hildebrand, and ex-Unicredit boss Jean-Pierre Mustier.
UBS is one of the most valuable European banks with a price-to-book ratio of 1, compared to Wall Street firms JPMorgan and Morgan Stanley, each of which trade at 1.3. That puts UBS in company with Goldman Sachs and Wells Fargo. By comparison, Credit Suisse trades at 0.3 along with Societe Generale and Deutsche Bank. Barclay’s and HSBC claim ratios of 0.4 and o.6, respectively.
According to the report, Kelleher and Hamers have spoken with major US investment houses such as Capital Group, T Rowe Price, Wellington, and Fidelity during their roadshow, in an attempt to persuade them to increase their holdings in UBS, which did not comment on the talks?
Because UBS’ business is heavily focused on higher-margin wealth management and less on higher-risk investment banking, the bank’s board believes its market capitalization could be double its book value, one of the sources added.
If we are a European bank with European investors, we will trade at one times book, The goal is two times.
