UBS market cap smashes $100B threshold

investmentnews.com:

On the first anniversary of UBS Group’s historic takeover of its former rival Credit Suisse, it’s becoming clear just how advantageous the deal has been for the bank. It has pushed its market capitalization past $100 billion to the highest level in almost 16 years and cemented its leading role in global wealth management. 

The most obvious effect for the Swiss lender is a growth in scale that would have required many years of painstaking work building client relationships if it were to be achieved organically. Overnight, the client funds managed by its wealth unit jumped by about one-fifth to $3.4 trillion at the time.

That has brought it closer to Morgan Stanley, which has about $5 trillion in its wealth management division, even if UBS is bigger in most places outside the US. 

The share price boost to UBS wasn’t a given on the Sunday one year ago when the emergency takeover brokered by the Swiss government was announced. The Zurich-based bank’s shares initially plunged by as much as 16% the following day amid uncertainty about what the deal would mean for UBS, pushing its valuation down to below $60 billion.

The jitters didn’t last long as investors looked at the bargain price tag, the presence of a government guarantee, and the immediate boost to scale from Credit Suisse’s client book. Some observers called it the deal of the century. 

In the 12 months since, UBS’s leadership has returned the guarantee, carved off much of the Credit Suisse assets it doesn’t want, and begun the task of figuring out how the merger can turbo-charge its ambitions. 

With the scale added by the Credit Suisse deal has come a push for even more. The bank now seeks to grow invested assets in its wealth management unit to more than $5 trillion