UBS Chair Colm Kelleher on Wednesday ruled out acquisitions as a method to grow the bank in the U.S.
“The message in the States is organic growth, no optionality, no distractions, no M&A,” Kelleher told attendees of a London-based summit held by the Financial Times. “We have a clear strategy in the States. Why are we complicating it for our investors?”
The appearance marked Kelleher’s first extensive comments on the bank’s U.S. strategy since UBS and robo-adviser Wealthfront in September terminated a $1.4 billion plan to fuse their businesses.
“There is no prospect of UBS growing inorganically in the States,” Kelleher said. “We have looked at the various properties in the States where we could scale up. They do not fit our criteria or culture, so we have made a decision to grow organically.”
The Swiss bank said in October 2021 that it would launch a digital wealth manager in the U.S. this year, putting it in direct competition with Morgan Stanley, Bank of America’s Merrill Lynch and others.
“What makes UBS different from Morgan Stanley or Bank of America is that we appeal to the ultra-wealthy,” Kelleher said Wednesday. “Where we bring value is high net worth and ultra-high net worth. I don’t think we particularly bring alpha in mass-affluent, which is why we walked away mutually from the Wealthfront deal. … It didn’t make sense.”
Neither UBS nor Wealthfront in September gave a reason behind the disintegration of the proposed acquisition, which would have added more than $27 billion in assets under management to UBS’s portfolio, and given the bank access to 470,000 new clients — many of whom are in the coveted millennial and Gen Z demographics.
Upon the deal’s collapse, UBS said it “remains committed to its growth plans in the US and will continue the build-out of its digital wealth management offering.”
Kelleher on Wednesday said the bank would focus on cross-selling to existing clients.
“We were very slow off the mark in selling banking products to our wealth management clients. That is low-hanging fruit,” he said, according to Bloomberg. “That’s something that my previous employer did very efficiently, so I’d like to think that I bring a new sense of urgency to that to get it done.”
Kelleher had served at Morgan Stanley for 32 years, rising to second in command before resigning in 2019. He became UBS’s chair in April.
Kelleher on Wednesday also waved off the idea that UBS is “actively benefiting” at the expense of its chief Swiss rival, Credit Suisse.
“We view them as a worthy competitor going through a crisis,” Kelleher said. “But clearly we are also in a world of clients moving money around, so where clients proactively approach us we either let the money come to us or we let it go to our American competitors.”
UBS saw a $17 billion uptick in wealth-management assets in this year’s third quarter. Credit Suisse, by comparison saw $88.3 billion in outflows between Sept. 30 and Nov. 11. Wealth-management customers removed $66.7 billion of that, according to Bloomberg.