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Who’d buy UBS?

Whether or not UBS really does plan to sell its investment bank is a moot point. Who’d buy it if UBS were to sell is even more debatable.

In different circumstances, Barclays might be a possibility: its fixed income prowess would sit well alongside UBS’s expertise in equities. However, with UBS’s subprime woes still mounting and Barclays still operating at capital ratios below its peers, a big purchase looks unlikely.

Who else is in the running? And should UBS be looking to offload its investment bank in the first place?

At least one analyst thinks not: “There is no reason I can see why the investment bank would be better off somewhere else other than with UBS,” says Matthew Clarke at Keefe, Bruyette & Woods. “The problem is the reputational damage to the investment bank as inflicted in the short term.”

Post your thoughts below…

Comments (13)

  1. The only real match for UBS is UBS. I can’t see anyone else wanting to buy its investment bank in the current climate. It needs to sit this out and focus on its core competencies in equities and advisory. Five years’ time it’ll be right as rain (trust me).

  2. Nomura

  3. UBS investment bank has already cut a lot of muscle and is going to find it difficult to hang on to its best people once they realise what bonuses will be like. Unless things change soon there’s not going to be much to sell.

  4. Lehman and UBS would work well together. Shame both are in a similar state.

  5. How about Credit Suisse buying UBS?????

  6. UBS is still in position to survive on its own, I don’t think it will need any boost injection from external market sources..

  7. By focussing on its core competencies, the investment banking arm of UBS should survive. In addition, no bank is really in a position to acquire anything, as most FIs are constrained by a certain lack of capital. Strategically, it wouldn’t really make sense for strong balance sheet institutions (the likes of Santander) to acquire “risky assets” in a time when the global economy is deteriorating further and when most banks will encounter further challenges. FIs are better off focussing on their core businesses, restructuring their balance sheets and let other players come in. Indeed, there are other financial institutions, such as hedge funds/ PE firms, with plenty of capital who should be allowed and encouraged to come in and take on failing/risky businesses/assets of banks like UBS.

  8. Bank of America? He he

  9. UBS will soldier on as a top tier bank – make no mistakes on that.

  10. UBS has been struggling, but I don’t think it needs to give up and sell itself to another bank. I am very sure UBS will manage to survive and get back on its foot. It is a matter of time. More over, in this situation, most (big) investment banks are in trouble too. Any small banks can afford to buy UBS???

  11. I admire the optimism on this site for UBS. However, the problem is no one knows the full extent of UBS’ losses and there are likely to be further write downs for UBS which is already the biggest European loser in the subprime market. At best UBS will sell off its investment bank, at worst it will become nationalised. A national banking champion will always get government support, to minimise the impact on the economy if the bank collapsed. It’s easy to believe there will always be a UBS, however, it is likely to be in a very different form than today…

  12. Logic is one thing: where the markets are heading is another matter altogether. As the crisis deepens, “subprime” will be replaced by another buzzword, which I believe will cut into the very heart of Basle II, and how we perceive banking risk in the credit scorched environment. Mark my words – you ain’t seen anything yet!

    Master of the Universe Reply
  13. Ive working for UBS for nearly 2 years. My father worked for Credit suisse during 5 years. What I can tell is that Im pretty sure that when a non-swiss bank tries to acquire UBS, then UBS and CS will merge to create a national champion (but as a defensive measure). Time will tell…

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