Market Overreacts to UBS Surprises: MacDonald

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Oct. 29 (Bloomberg) -- Lucy MacDonald, CIO for global equities at Allianz Global Investors, talks with Francine Lacqua about results from UBS and her view of the overall European banking sector. She speaks on Bloomberg Television’s “On The Move.”

Let's get back to lucy mcdonald of allianz.

You own u.b.s.. it is down 6.2%. how disappointed are you that they won't meet their goal in 2015 and does it mean you will sell shares?

No.

we were anticipating being able to pay a significant amount of capital out to shareholders from 2015 onward.

It lookts like -- looks like it may be later in the year.

However, that that is only part of the investment case.

The other part is the interesting asset management at wealth management business.

It goes from strength to strength.

That is a part of the story that is unchanged by this.

So i think it is a slight disappointment but probably a little bit of overreaction in markets.

You still prefer u.b.s. to deutsche bank?

Yes.

Better quality in investment banking.

I want to get a general overview on your taken to banking sector.

First, i want to listen to chairman at barclays.

He said it is tough out there for banks but overall, some of them are just not taking the risks they should.

I do think there is less risk taking now.

If i have a concern now, is that there probably isn't this economic environment, enough readiness to take risks.

What do you make of that?

First of all, there is a lot of litigation out there.

We still don't know what the asset quality review will be for these banks.

At the same time, david walker saying look, it may be too risk any in certain institutions, but they are not lending enough taking enough risk looking at what the economy is showing us.

It is according to region.

The u.s. has gone through all of this.

It is beginning to lend.

That has been the case for two years, but in europe, in the u.k. it is slightly different.

The u.k. has cleaned up the balance sheets mostly, but the lending is still a bit slow.

We're beginning to see something happening there.

In europe, it is still a very early stage.

Starting to review details now.

That is going to take at least six months to really get that through the system.

So we are somewhere behind in europe.

However, at least we have got the plan now.

It is beginning to move, no matter how slowly.

We will get there.

The e.c.b. is being supportive.

They can't do everything.

They have got to have the institution thing built and make sure the balance sheets are strong enough.

If we know they are going through, and we know e.c.b. may ell fail some of them and the governments may have to step in.

The weaker banks, we can guess which ones they are.

Periphery banks.

Would you stay away from them?

While this is going on, you're now.netting through a period where you're going to -- now getting through a period.

I think it will be wise to wait and speesm lucy, thanks so much.

This text has been automatically generated. It may not be 100% accurate.

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