Yahoo Finance UBS Group (UBS) to Shut TBA Trading in US Mortgage Unit
UBS Group AG UBS is planning to wind down to-be-announced (“TBA”) trading in its U.S. mortgage unit that involves forward sales of such securities, per a Bloomberg article.
UBS has been shifting its business strategy to focus on financing mortgage originators. The intent to wind down TBA trading is a part of the strategic business shift, a person familiar with the matter stated.
The number of jobs to be affected due to the unit closure could not be anticipated immediately.
The planning of winding up the TBA trading business comes at the heels of UBS integrating the operations of Credit Suisse Group AG, in its own business. UBS announced the acquisition of Credit Suisse in March 2023, in an emergency takeover in an all-share deal for about $3.2 billion. The acquisition involved government-backed efforts to fend off panic in the global banking system, following the collapse of Silicon Valley Bank.
Last week, UBS Group AG received a green signal to acquire Credit Suisse Group AG from European Commission — European Union's antitrust regulator. The approval was given after a one-month review which concluded that the deal would not raise competition concerns in “any of the markets examined,” investment banking or wealth and asset management businesses.
During the deal announcement, it was expected that the combined entity will have more than $5 trillion in total invested assets. The acquisition will also fortify UBS Group’s position as a preeminent global wealth manager with more than $3.4 billion in wealth management assets.
The combined entity will have more than $1.5 trillion in invested management assets. UBS has imposed numerous restrictions on Credit Suisse, including lending and spending limits, and limitations on the size of certain contracts the latter can enter into.
UBS Group’s shares have gained 7.7% on NYSE over the past six months compared with the industry’s rise of 1.6%.
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UBS carries a Zacks Rank #3 (Hold) at present. You can see the complete list of today's Zacks #1 Rank (Strong Buy) stocks here.
Restructuring Efforts by Other Banks
The continued slowdown in the investment banking business has prompted Morgan Stanley MS to initiate another round of job cuts. The company has decided to cut 3,000 jobs in the second quarter of 2023, according to a source familiar with the matter.
Amid the tough economic environment, a slowdown in deal-making has prompted MS to consider its headcount.
Barclays BCS is planning to shut 15 more branches in the coming months. Of the total, 12 are located in England, two in Scotland and one in Wales.
In England, most of the branch closures will occur in August, while a few are expected to close in September. The Scotland branches will shut in August, while the Wales branch is still waiting to get any confirmation. Earlier in 2022, BCS announced its plans to shut down 132 branches in the region, with several of those already closed.
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