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Per a Reuters article, UBS Group UBS assured job safety to some of its employees who would be affected by the shifting of base to Frankfurt from London on account of Brexit. The company plans to shift employees by using a decentralized approach.
Based on this approach, UBS Group expects less than 200 positions to be affected. It currently employees nearly 5000 people in the London office. Also, per Reuters, in a memo issued by the company, it was mentioned that the people affected will be informed about their job status in a few months and that the decision regarding relocations would be based on location of clients.
Also, in its annual filing, UBS Group mentioned plans to merge UBS Limited with UBS Europe SE, prior to Britain’s exit from the European Union.
Since, post Brexit, Britain would lose the “passporting rights,” which enable international banks to open branches and conduct business easily in any part of the European territory after the initial process of registration is over, the banks have been busy carrying out contingency plans.
Post Brexit Plans of Other Banks
In late 2017, Credit Suisse Group AG CS disclosed plans to distribute its trading, investment-banking and wealth management operations post Brexit to various European cities. Frankfurt, Madrid and Paris had topped the bank’s list of preferable locations.
Further, Citigroup C plans to open an innovation center in London, marking what might be the first strategic step by a U.S. banking giant in the area post-Brexit. The bank would be hiring about 60 technologists for the center. Also, the new lab would be supporting the bank’s global markets and securities services business, and will be part of a network that already employs more than 250 people in labs from Ireland to Israel, Singapore and Mexico.
UBS Group’s restructuring initiatives along with cost control efforts keep us encouraged of its growth prospects. However, its profitability continues to be challenged by negative interest rates in the domestic economy.
Shares of UBS Group have gained 15.5% over the past year, outperforming the industry’s rally of 13.3%.
The stock carries a Zacks Rank #3 (Hold).You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
A better-ranked stock in the same space is HSBC Holdings plc HSBC, carrying a Zacks Rank #2 (Buy). Its earnings estimates for 2018 have been revised 4.2% upward over the last 60 days. Also, its shares have gained 20.4% over the past year.
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