UBS’s McCann Denies Speculation of Talks With Wells Fargo
It is “not true,” Robert J. McCann, the head of its wealth management Americas unit, said in an ``InBusiness with Margaret Brennan'' interview on Bloomberg Television. “I have not been part of any meeting with Wells Fargo. This is a business that is an important part of UBS. It’s an important part of our platform in the Americas and we like the wealth management business globally.”
An acquisition of UBS’s U.S. wealth management unit would be “one of the best fits” for San Francisco-based Wells Fargo to expand its business, Keefe, Bruyette & Woods analysts Frederick Cannon and Brian Kleinhanzl said in a note on May 13.
McCann, 53, joined Zurich-based UBS from Merrill Lynch & Co. in October 2009 to help return the wealth management Americas division to profit. The unit includes the former Paine Webber brokerage that the Swiss bank acquired in 2000.
Wealth management Americas, which aims for more than 1 billion francs ($1.13 billion) in annual pretax earnings, reported first-quarter profit of 111 million francs after a loss of 130 million francs for all of 2010. The unit has seen three consecutive quarters of net new money additions after clients pulled net 40.5 billion francs over the previous nine quarters.
Wells Fargo is looking for an acquisition to bolster a unit that Chief Executive Officer John Stumpf has called “sub- optimized.” The bank could pay as little as $6 billion, the amount approved by regulators for share repurchases, or as much as $20 billion, the KBW analysts wrote.
‘Create Greater Scale’
A purchase of UBS’s unit would give Wells Fargo the ability to “create greater scale” in a highly fragmented brokerage industry, the analysts wrote. Wells Fargo ranks third among U.S. retail brokerages with about 15,200 advisers.
Vince Scanlon, a Wells Fargo spokesman, declined to comment.
UBS is the world’s second-largest wealth manager after Charlotte, North Carolina-based Bank of America Corp., according to a survey by London-based Scorpio Partnership, which provides research and industry analysis. Wells Fargo ranks fourth behind Morgan Stanley, according to the survey. Wealth managers typically cater to clients with at least $1 million to invest.
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