UBS to wind down private banking services
by Kay Murchie
Investment bank UBS, one of the biggest casualties of the sub-prime crisis, has confirmed it is to close its Switzerland-based private banking services to US clients.
At least 60 private bankers in Zurich, Geneva and Lugano are affected. It is believed that some may transfer to UBS Swiss Financial Advisers, a Zurich subsidiary created specially to meet US regulatory requirements.
Private banking is one of UBS’s most profitable services and the bank experiences among the highest margins of top international wealth managers.
In 2006, private banking accounted for Sfr5.8 billion (€3.6 billion) of the group’s total pre-tax profit of Sfr14.4 billion. Consequently, the closure of this activity will undoubtedly have a knock-on effect.
The announcement follows the termination of business in Iran. The moves are unconnected but reflect increasing concerns at a bank that employs approximately 25% of its staff in the US.
A spokesperson for UBS said this strategic alignment brings our services closer to the clients, streamlines operations and enhances our ability to ensure compliance with applicable laws and regulations.
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