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UBS Group AG Eyes Full Ownership of Securities Joint Venture in China
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UBS Group AG (UBS - Free Report) is on track to gain full ownership of its securities venture in China, UBS Securities Co. Limited (“UBS-S”). This move comes as UBS’ joint venture (JV) partner, Beijing State-owned Asset Management (“BSAM”), announced its decision to sell a 33% stake in UBS-S, per Reuters.
BSAM is auctioning its stake for 1.5 billion yuan ($207.10 million), according to the China Beijing Equity Exchange. At present, UBS Group AG owns a 67% stake in UBS-S and is expected to bid for the remaining shares.
An UBS executive confirmed to Reuters on Tuesday that, "As indicated earlier, the process for UBS to increase its stake in UBS Securities to 100% is in progress.”
UBS’ Strategic Actions to Expand Presence in China
UBS’ latest move to acquire the remaining stake in UBS-S to secure full ownership represents the second phase of UBS Group AG's efforts to streamline operations and increase its presence in China. The first phase included UBS’ divestiture of its stake in Credit Suisse Securities (China) Ltd. to BSAM in June 2024.
Notably, UBS Group AG acquired Credit Suisse in 2023, through which it inherited Credit Suisse’s securities unit.
The recent move highlights UBS’ strategic focus on strengthening its footprint in China to position itself for long-term growth in the world’s second-largest economy.
UBS’ Other Expansion Efforts in Key Growth Markets
Last week, UBS announced that it is seeking a wider banking license to operate in the United States, as the bank views the country as a crucial market for its growth strategy. This was reported by Bloomberg. UBS is considering an application for broader operational permission from the Office of the Comptroller of the Currency.
In October 2024, UBS’ Chairman Colm Kelleher said that the bank’s long-term vision includes acquiring a U.S. wealth management firm to accelerate growth in the region.
According to a Reuters report from September 2024, UBS is in discussions to form an Indian wealth management JV with 360 One WAM, a Mumbai-based firm, formerly known as IIFL Wealth Management. This potential JV is expected to expand UBS’ Indian wealth management business to high-net-worth individuals in addition to its existing ultra-high-net-worth individuals.
UBS’ efforts to increase its presence in such rapidly growing markets are likely to help the bank capitalize on these country’s growing economies and diversify its market and revenue streams.
UBS Group AG’s Price Performance & Zacks Rank
Over the past six months, UBS shares have gained 3.8% on the NYSE against the industry’s decline of 9%.
Image Source: Zacks Investment Research
Currently, UBS Group carries a Zacks Rank #3 (Hold).
The Zacks Consensus Estimate for NWG’s earnings has been revised 3.3% upward for 2024 over the past month. Shares of NWG have gained 24.7% over the past six months.
Earnings estimates for GGAL have been revised 8.4% upward over the past 30 days. In the past six months, GGAL shares have surged 70.9%.
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UBS Group AG Eyes Full Ownership of Securities Joint Venture in China
UBS Group AG (UBS - Free Report) is on track to gain full ownership of its securities venture in China, UBS Securities Co. Limited (“UBS-S”). This move comes as UBS’ joint venture (JV) partner, Beijing State-owned Asset Management (“BSAM”), announced its decision to sell a 33% stake in UBS-S, per Reuters.
BSAM is auctioning its stake for 1.5 billion yuan ($207.10 million), according to the China Beijing Equity Exchange. At present, UBS Group AG owns a 67% stake in UBS-S and is expected to bid for the remaining shares.
An UBS executive confirmed to Reuters on Tuesday that, "As indicated earlier, the process for UBS to increase its stake in UBS Securities to 100% is in progress.”
UBS’ Strategic Actions to Expand Presence in China
UBS’ latest move to acquire the remaining stake in UBS-S to secure full ownership represents the second phase of UBS Group AG's efforts to streamline operations and increase its presence in China. The first phase included UBS’ divestiture of its stake in Credit Suisse Securities (China) Ltd. to BSAM in June 2024.
Notably, UBS Group AG acquired Credit Suisse in 2023, through which it inherited Credit Suisse’s securities unit.
The recent move highlights UBS’ strategic focus on strengthening its footprint in China to position itself for long-term growth in the world’s second-largest economy.
UBS’ Other Expansion Efforts in Key Growth Markets
Last week, UBS announced that it is seeking a wider banking license to operate in the United States, as the bank views the country as a crucial market for its growth strategy. This was reported by Bloomberg. UBS is considering an application for broader operational permission from the Office of the Comptroller of the Currency.
In October 2024, UBS’ Chairman Colm Kelleher said that the bank’s long-term vision includes acquiring a U.S. wealth management firm to accelerate growth in the region.
According to a Reuters report from September 2024, UBS is in discussions to form an Indian wealth management JV with 360 One WAM, a Mumbai-based firm, formerly known as IIFL Wealth Management. This potential JV is expected to expand UBS’ Indian wealth management business to high-net-worth individuals in addition to its existing ultra-high-net-worth individuals.
UBS’ efforts to increase its presence in such rapidly growing markets are likely to help the bank capitalize on these country’s growing economies and diversify its market and revenue streams.
UBS Group AG’s Price Performance & Zacks Rank
Over the past six months, UBS shares have gained 3.8% on the NYSE against the industry’s decline of 9%.
Image Source: Zacks Investment Research
Currently, UBS Group carries a Zacks Rank #3 (Hold).
Foreign Banks Worth Considering
Some better-ranked bank stocks are NatWest Group plc (NWG - Free Report) and Grupo Financiero Galicia S.A. (GGAL - Free Report) , each sporting a Zacks Rank #1 (Strong Buy) at present. You can see the complete list of today’s Zacks #1 Rank stocks here.
The Zacks Consensus Estimate for NWG’s earnings has been revised 3.3% upward for 2024 over the past month. Shares of NWG have gained 24.7% over the past six months.
Earnings estimates for GGAL have been revised 8.4% upward over the past 30 days. In the past six months, GGAL shares have surged 70.9%.