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UBS Group (UBS) Moves up a Tier on FSB G-SIB List Post Merger
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In its annual review, the Financial Stability Board (“FSB”) has updated its list of global systemically important banks (G-SIBs), underlining changes in the banking sector's landscape. The reshuffling resulted in UBS Group AG (UBS - Free Report) moving up a tier, reflecting its expanded market footprint post the merger with Credit Suisse.
Particularly, UBS has advanced from bucket 1 to bucket 2, indicating its increasing systematic significance in the global financial landscape. The elevation demands higher capital reserves and regulatory scrutiny.
In March 2023, UBS Group announced an all-share deal to acquire its troubled rival Credit Suisse in government-backed efforts to fend off panic in the global banking system.
As of Sep 30, 2023, the company had $1.64 trillion in total assets, of which $559.4 billion was from Credit Suisse. The acquisition fortifies UBS Group’s position as a preeminent global wealth manager, with more than $3.6 billion in wealth management assets as of the third-quarter 2023 end. The combined entity has invested assets of more than $1.5 trillion in the asset management segment.
Along with UBS, the Agricultural Bank of China and China Construction Bank have risen to the same bucket as UBS. Two banks — Credit Suisse and Italy’s UniCredit — have been removed. Also, China's Bank of Communications has been added to the G-SIB list.
These adjustments have brought down the total number of G-SIBs from 30 to 29. The new capital requirements have to be complied by Jan 1, 2025, to ensure that banks have ample capital to withstand financial stress and maintain stability in the global economy.
UBS has now been placed in a similar category with other major institutions like Deutsche Bank (DB - Free Report) and Goldman Sachs (GS - Free Report) .
With this, GS, DB and UBS, along with others in the same bucket, will have to maintain an additional capital buffer of 1.5% for common equity loss absorbency.
UBS Group’s shares have gained 4.6% on the NYSE over the past three months compared with the industry’s rise of 1%.
Image: Shutterstock
UBS Group (UBS) Moves up a Tier on FSB G-SIB List Post Merger
In its annual review, the Financial Stability Board (“FSB”) has updated its list of global systemically important banks (G-SIBs), underlining changes in the banking sector's landscape. The reshuffling resulted in UBS Group AG (UBS - Free Report) moving up a tier, reflecting its expanded market footprint post the merger with Credit Suisse.
Particularly, UBS has advanced from bucket 1 to bucket 2, indicating its increasing systematic significance in the global financial landscape. The elevation demands higher capital reserves and regulatory scrutiny.
In March 2023, UBS Group announced an all-share deal to acquire its troubled rival Credit Suisse in government-backed efforts to fend off panic in the global banking system.
As of Sep 30, 2023, the company had $1.64 trillion in total assets, of which $559.4 billion was from Credit Suisse. The acquisition fortifies UBS Group’s position as a preeminent global wealth manager, with more than $3.6 billion in wealth management assets as of the third-quarter 2023 end. The combined entity has invested assets of more than $1.5 trillion in the asset management segment.
Along with UBS, the Agricultural Bank of China and China Construction Bank have risen to the same bucket as UBS. Two banks — Credit Suisse and Italy’s UniCredit — have been removed. Also, China's Bank of Communications has been added to the G-SIB list.
These adjustments have brought down the total number of G-SIBs from 30 to 29. The new capital requirements have to be complied by Jan 1, 2025, to ensure that banks have ample capital to withstand financial stress and maintain stability in the global economy.
UBS has now been placed in a similar category with other major institutions like Deutsche Bank (DB - Free Report) and Goldman Sachs (GS - Free Report) .
With this, GS, DB and UBS, along with others in the same bucket, will have to maintain an additional capital buffer of 1.5% for common equity loss absorbency.
UBS Group’s shares have gained 4.6% on the NYSE over the past three months compared with the industry’s rise of 1%.
Image Source: Zacks Investment Research
UBS carries a Zacks Rank #3 (Hold) at present. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.