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UBS Gets Court Approval to Move Euro 32B of Assets From UK

Zacks Equity Research

UBS Group AG UBS has received a clear signal from the London court to move assets worth up to €32 billion from Britain to Germany on Mar 1, 2019, in order to continue operating in the European Union (“EU”) post Brexit. The move is expected to result in transfer of less than 200 jobs. The news was first reported by Bloomberg.

The court has approved transfer of operations from UBS Limited — the company’s London-based subsidiary conducting investment banking activities — to Frankfurt-based UBS Europe SE.

The article reported that the bank will be transferring deposit taking and some operations in equities, foreign currency and credit, as well as some of its corporate client solutions function. These cover structured finance, lending, equity capital markets, debt capital markets, leveraged capital markets and mergers-and-acquisitions work.  

Before the U.K. unit is dissolved, some of its operations in cash equities, rates and credit, and exchange-traded derivatives — mostly business with “exempt clients” that doesn’t need to move abroad because of Brexit — will be transferred to UBS Group’s London branch. These operations cover about 15% of the British unit’s assets and 43% of profits.

The Swiss bank’s plans could be postponed until Jul 24 at the latest, if the bank “receives sufficient comfort before then that suitable transition arrangements have been agreed by the U.K. and the EU,” according to court filings quoted by Bloomberg.

Also, the transfer plans will lapse if there is no Brexit by that date or if the decision to leave the EU gets reversed, the documents said.

Another bank to have received the court’s approval for transfer of assets is Barclays BCS. The bank is allowed to shift €190 billion of its clients' assets to Ireland. The move is expected to affect about 5000 clients.

In three months’ time, UBS Group has lost 8.2% on the NYSE against 2.4% growth recorded by the industry.

The company currently carries a Zacks Rank #4 (Sell).

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