(Bloomberg) -- UBS Group AG’s recently merged wealth-management business is the best-positioned globally, according to JPMorgan Chase & Co.
Switzerland’s largest bank is JPMorgan’s top pick in the wealth-management sector over local rivals Credit Suisse Group AG and Julius Baer Ltd. thanks to its scale in Asia’s booming wealth market, analysts led by Kian Abouhossein wrote in a note to clients. About 60 percent of UBS’s invested assets come from ultra-high-net-worth individuals.
"We change our pecking order with UBS now our preferred play, as we see better risk reward with a strong wealth management franchise in the medium term, with higher mandate penetration, higher share of ultra-high-net-worth clients and an equity-geared investment bank," the analysts said. "Our new Swiss WM pecking order is: UBS, Julius Baer and Credit Suisse."
UBS is the largest player by assets under management in Asia Pacific with 373 billion Swiss francs ($376 billion), which positions it well to capture growth in the region, the analysts said. Shares in UBS rose as much as 2.3 percent in Zurich on Tuesday, compared with a rise of as much as 1 percent in the Bloomberg Europe 500 Banks and Financial Services Index.
UBS, the world’s largest wealth manager, can do more on costs and is trailing Credit Suisse, which has shown greater momentum. Savings from the merger of UBS’s wealth management units could be a potential boost to profits which has not yet been factored in, while cost savings at Credit Suisse are largely reflected in estimates, they said.
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