UBS' U.S. brokerage business not for sale: Sergio Ermotti

Sergio Ermotti, chief executive of UBS Group AG, took time Monday to deny renewed speculation that the firm's Wealth Management Americas group might be for sale.
FEB 10, 2015
Sergio Ermotti, chief executive of UBS Group AG, denied Monday renewed speculation that the firm's Wealth Management Americas group might be for sale. In a conference call to discuss earnings, Mr. Ermotti said the group had the “most productive advisers in the industry” and the group was “critical to our strategy and to our growth prospects.” “It's not hard to see why this strong business with its strategic and financial importance looks attractive to our competitors,” Mr. Ermotti said. “But it's worth even more to UBS and its shareholders and that's why it's not for sale.” The announcement follows news articles this quarter indicating Morgan Stanley Wealth Management's chief executive, James Gorman, had mulled a purchase of the UBS unit. Mr. Ermotti did not address any specific reports. The rumor of a possible sale has followed the unit for several years, but has always been denied. The statement also comes on the heels of other strategic moves in the U.S. from foreign-based financial firms. In June, London-based, Barclays PLC agreed to sell the assets of its U.S.-based brokerage unit to Stifel Financial Corp. MOST PRODUCTIVE ADVISERS In the second quarter, UBS advisers remained the most productive compared to its wirehouse peers. The firm's advisers generated average annualized revenue of $1.12 million in the second quarter, above the $1.04 million at Bank of America Merrill Lynch. But UBS Wealth Management Americas posted a 14% decline in second quarter profits compared with the same quarter last year. Pre-tax operating profit fell to $205 million from $238 million a year ago. The firm's headcount also fell to 6,948 from 7,119 in the second quarter last year. A spokesman for the firm, Gregg Rosenberg, attributed the decline in profit to higher litigation and regulatory expenses. The declines in headcount were mostly due to letting go lower producing advisers, he said. “We are continuing our strategy to be disciplined in our recruiting, selectively hiring advisers in the top two quintiles and help[ing] advisers in the lowest two quintiles transition out of the firm,” he wrote in an email.

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