UBS may see $150 billion drop in wealth management client assets

UBS Group AG may see a $150 billion decline in its wealth management client assets following the acquisition of Credit Suisse Group AG, analysts at JPMorgan Chase & Co. estimate.

The decline would come as a result of client outflows, overlap between the two banks and ongoing cost savings, bank analysts Kian Abouhossein and Amit Ranjan wrote in a note published Thursday.

The analysts said that the integration process could create share price volatility, due to factors including restructuring, mark-downs and litigation.

UBS closed the deal earlier this month to acquire Credit Suisse after the emergency, government-brokered takeover was agreed in March. UBS has signaled it intends to significantly downsize Credit Suisse’s investment bank, and the fusion is likely to involve thousands of job losses.

The takeover of Credit Suisse remains a tremendous upside for UBS’ wealth management division.

“UBS, on our forecasts, will be a wealth management powerhouse, generating 60% of group profits” from the business, the analysts said.

UBS is due to report its second-quarter results on Aug. 31. 

The acquisition of Credit Suisse has boosted UBS’ client assets to roughly $5 trillion, from $3.9 trillion. The business is run by Iqbal Khan, a former Credit Suisse wealth banker.