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UBS Group (UBS) to Undergo Two Stress Tests in '24 by FINMA
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UBS Group AG (UBS - Free Report) will be subjected to two stress tests this year along with around 40 reviews by Swiss financial regulator, FINMA. The increased vigilance on the country's last remaining global systemic bank comes after its 2023 takeover of Credit Suisse, escalating concerns about "too big to fail" lenders.
Following the acquisition, UBS’ balance sheet is twice the size of the Swiss economy. This might result in stringent capital and liquidity requirements for UBS.
Per Thomas Hirschi, FINMA's head of the banks division, "Forty on-site supervisory reviews are planned at UBS in Switzerland and abroad, as well as two in-depth stress tests this year."
Tests on banks are carried out to assess institutions' resilience in extreme economic situations. FINMA’s assessment of UBS will focus on operational stability, capital and liquidity planning as well as emergency preparedness.
In June 2023, UBS Group completed the acquisition of Credit Suisse (a regulatory-assisted deal). This move is expected to enhance capabilities in wealth and asset management as well as aid in growing its capital-light businesses. The company is on track to complete the integration process by 2026-end.
Pursuant to its business restructuring plans, it is likely to wind down its Non-Core and Legacy portfolio, releasing more than $6 billion of capital by 2026-end. Through these efforts, the company aims to achieve gross cost reductions of around $13 billion by 2026-end compared with 2022 levels.
This aside, it was recently reported that the company intended to expand its wealth management business in the United States over the next three or four years on the back of mergers and acquisitions.
Given a solid balance-sheet position, UBS Group will be able to undertake beneficial strategic acquisitions.
Over the past six months, UBS shares have gained 23.2% on the NYSE compared with the industry’s growth of 14.8%.
Vinci Partners Investments Ltd. (VINP - Free Report) inked a deal to buy Compass Group LLC to redefine the investment landscape in Latin America. The transaction is set to close in the third quarter of 2024, pending regulatory approvals.
With this acquisition, VINP will solidify its position as a key player in the Latin America investment landscape, boasting more than $50 billion in assets under management across private markets, investment products and solutions, public equities and corporate advisory segments.
Last month, LPL Financial Holdings (LPLA - Free Report) announced its plan to acquire Atria Wealth Solutions, Inc. This move underscores the company’s commitment to expanding its reach and enhancing its offerings in the wealth management solutions market.
The acquisition aligns with LPLA’s goal to empower independent financial advisors and institutions nationwide by providing them with comprehensive support and resources. The agreement involves acquiring Atria Wealth Solutions’ broker-dealers, which include subsidiaries catering to both independent financial professionals and banks/credit unions.
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UBS Group (UBS) to Undergo Two Stress Tests in '24 by FINMA
UBS Group AG (UBS - Free Report) will be subjected to two stress tests this year along with around 40 reviews by Swiss financial regulator, FINMA. The increased vigilance on the country's last remaining global systemic bank comes after its 2023 takeover of Credit Suisse, escalating concerns about "too big to fail" lenders.
Following the acquisition, UBS’ balance sheet is twice the size of the Swiss economy. This might result in stringent capital and liquidity requirements for UBS.
Per Thomas Hirschi, FINMA's head of the banks division, "Forty on-site supervisory reviews are planned at UBS in Switzerland and abroad, as well as two in-depth stress tests this year."
Tests on banks are carried out to assess institutions' resilience in extreme economic situations. FINMA’s assessment of UBS will focus on operational stability, capital and liquidity planning as well as emergency preparedness.
In June 2023, UBS Group completed the acquisition of Credit Suisse (a regulatory-assisted deal). This move is expected to enhance capabilities in wealth and asset management as well as aid in growing its capital-light businesses. The company is on track to complete the integration process by 2026-end.
Pursuant to its business restructuring plans, it is likely to wind down its Non-Core and Legacy portfolio, releasing more than $6 billion of capital by 2026-end. Through these efforts, the company aims to achieve gross cost reductions of around $13 billion by 2026-end compared with 2022 levels.
This aside, it was recently reported that the company intended to expand its wealth management business in the United States over the next three or four years on the back of mergers and acquisitions.
Given a solid balance-sheet position, UBS Group will be able to undertake beneficial strategic acquisitions.
Over the past six months, UBS shares have gained 23.2% on the NYSE compared with the industry’s growth of 14.8%.
Image Source: Zacks Investment Research
Currently, UBS Group carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Expansion Efforts by Other Companies
Vinci Partners Investments Ltd. (VINP - Free Report) inked a deal to buy Compass Group LLC to redefine the investment landscape in Latin America. The transaction is set to close in the third quarter of 2024, pending regulatory approvals.
With this acquisition, VINP will solidify its position as a key player in the Latin America investment landscape, boasting more than $50 billion in assets under management across private markets, investment products and solutions, public equities and corporate advisory segments.
Last month, LPL Financial Holdings (LPLA - Free Report) announced its plan to acquire Atria Wealth Solutions, Inc. This move underscores the company’s commitment to expanding its reach and enhancing its offerings in the wealth management solutions market.
The acquisition aligns with LPLA’s goal to empower independent financial advisors and institutions nationwide by providing them with comprehensive support and resources. The agreement involves acquiring Atria Wealth Solutions’ broker-dealers, which include subsidiaries catering to both independent financial professionals and banks/credit unions.