$30 billion up for grabs as major bank dumps part of HNW portfolio

Who doesn’t want more clients? Well, this wealth management unit for one.

In a strategic move to streamline its operations, UBS Group is offloading $5 billion in managed assets from its high-net-worth client portfolio, as it continues to integrate and reevaluate the recent acquisition of Credit Suisse components.

According to its latest earnings report released Tuesday, the financial giant has transferred these assets to its newly established wind-down sector, the non-core and legacy division, within the third quarter. Additionally, UBS has earmarked $30 billion in assets under the wealth management umbrella as “related to non-strategic relationships,” indicating a shift in its management focus.

Following its expedited acquisition of Credit Suisse in June, UBS has been rigorously auditing the client accounts and assets from the failed Swiss giant, aligning them with UBS’s more risk-averse operational ethos.

The bank has previously announced a scale-down of Credit Suisse’s investment banking activities and is in the process of implementing a “culture filter” among personnel to align with UBS’s ethical and business standards.

UBS has already stewarded an exodus of ex-Credit Suisse staff, which, in some cases, helped it to pay less in redundancy. Chief Executive Sergio Ermotti said that the bank has lost 500 relationship managers since the rescue, part of the 13,000 total staff that the bank has lost over the last year.

UBS disclosed that the divestiture from the wealth management sector led to a 3% contraction in the division’s invested assets compared to the previous quarter. However, UBS has managed to stabilize the wealth management services of Credit Suisse, marking the first uptick in client investments in 18 months.

The non-core and legacy division, which is handling the phased-out assets, reported an increase in its quarterly pretax loss, ballooning to $1.93 billion from the prior quarter’s $478 million. This significant loss led UBS to report its first quarterly loss in nearly six years, a notable event for the banking institution.