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UBS Group is planning to shut smaller-value Credit Suisse accounts numbering in the low thousands at its Asia-Pacific wealth management arm to exit relationships with poor returns, according to people familiar with the matter.
The lender is reviewing the accounts with a balance of around US$2 million or less, said the people, who asked not to be identified discussing private information. Many of the accounts are in the Asian business hubs of Singapore and Hong Kong, the people said.
The move underscores a broader effort by Sergio Ermotti’s UBS to carve out parts of Credit Suisse that it doesn’t want after acquiring its rival in a three billion Swiss franc (S$4.5 billion) state-brokered takeover announced a year ago.
The world’s largest wealth managers have in recent years put Asia in the centre of their growth plans, but a downturn in China’s economy has meant many clients are transacting less. UBS oversees about US$3.9 trillion in assets at its wealth division, 17 per cent of which is in Asia-Pacific.
A spokesperson for UBS declined to comment.
While the bank still wants to keep clients above that threshold, the lower value accounts do not generate high enough returns, the people said. Clients with larger balances tend to make larger transactions, generating higher fees.
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Just over four years ago, Credit Suisse carved out an entity in Europe in a bid to better serve the millionaires who required investment advice but not the bespoke services demanded by its top billionaire clients.
Since closing the takeover of Credit Suisse in June, UBS has outlined major targets for the integration of its former rival including around US$13 billion in cost savings.
Both Ermotti, who returned to lead UBS last year, and chairman Colm Kelleher have warned that 2024 will be a more difficult year in terms of keeping costs down.
Prior to the UBS takeover, Credit Suisse had pursued a decade-long push into South-east Asia, where it lent to billionaire business families. That helped make Credit Suisse the go-to foreign bank for entrepreneurs, a status that could help boost UBS’s ambitions. BLOOMBERG
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