UBS, during an investor meeting last Thursday, was bucking calls for the separation of operations of the Swiss bank between its investment banking and wealth management divisions. One of the investors seeking a review of the structure of the bank is activist investor Knight Vinke Asset Management.
This intervention by Knight Vinke comes six months after UBS decided to withdraw from the riskiest areas of its investment banking operations, within days after its first quarter results have overcome expectations. This provided investors reassurance that the current structural strategy was working.
There were many investors criticizing the Knight Vinke argument that the investment arm was holding back its wealth management operations. These investors know that the bank's wealth management arm has attracted the most monetary value for the bank in the first quarter more than what the whole operations has earned in the last six years.
One of the investors said, "I would not buy the argument that one side is preventing the other side from reaching full potential. For sure, there was a phase where that was the case because of the way the investment bank was run but to me, UBS is learning from past mistakes and is moving forward."
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