UBS

As every Sunday, the most important news from the past week, as well as the dates for the coming week.

Also as a video:

https://youtube.com/shorts/oV3omttRVN0?si=4olXTaUPp-fMjSYS

Monday:

The subsidy bankruptcy of our Economics Minister continues. At $INTC (+0,36 %) Intel and $WOLF (-6,96 %) Wolfspeed, the plants were not even built and therefore no subsidies have been paid. Things could now get even worse at Northvolt, where the subsidies have already been paid out. However, Northvolt has now filed for bankruptcy. In the worst case scenario, the state has given away 620 million euros of taxpayers' money.

https://www.handelsblatt.com/politik/deutschland/batteriefabrik-northvolt-insolvenz-koennte-steuerzahler-620-millionen-euro-kosten/100092346.html

On Monday, the mood in US industry brightened surprisingly strongly. Nevertheless, the purchasing managers' index signals a slowdown.

https://www.boerse.de/nachrichten-amp/US-Anleihen-Kursverluste-nach-robusten-Wirtschaftsdaten/36763380

Tuesday:

The DAX breaks through the 20,000 point mark for the first time in its history, reaching a new record high.

https://www.handelsblatt.com/finanzen/maerkte/marktberichte/dax-aktuell-20000-punkte-ein-rekord-in-unsicheren-zeiten/100079470.html

South Korea's president declares martial law. This is in response to the threat posed by North Korea. The rest of the world sees this as a coup d'état and protests break out.

https://www.instagram.com/p/DDHpNlBsl0c/?igsh=MW5ycDh2NHNkbno1dg==

Thursday:

$HFG (-0,91 %) Hellofresh can gain significantly after several upgrades by analysts. Jeffries and JPMorgan have raised the price target by 100% in some cases.

https://www.deraktionaer.de/artikel/aktien/hellofresh-rally-geht-weiter-kursziel-verdoppelt-20371228.html

Friday:

The largest free trade zone in the world could be created, the so-called Mercosur agreement between the EU and South America. France still wants to scupper the deal, but Javier Milei wants the free trade zone. The Mercosur agreement was adopted on Friday evening.

https://www.handelsblatt.com/politik/international/handelsabkommen-mega-handelsdeal-zwischen-eu-und-mercosur-auf-zielgeraden/100090629.html

Consumer sentiment in the US has continued to improve. The Michigan Consumer Sentiment Index rose. This means that consumer sentiment has improved for the fifth month in a row.

https://www.advisorperspectives.com/dshort/updates/2024/12/06/michigan-consumer-sentiment-edges-higher

Saturday:

Billionaires are relocating more often since Covid. At least according to a new study by $UBSG (+1,8 %) UBS. The main influencing factors are the quality of life in the respective countries, as well as the legal framework for the wealthy. The main target countries are therefore also countries with particularly low taxes: The USA 🇺🇸, Switzerland 🇨🇭, the UAE 🇦🇪 and Singapore 🇸🇬.

https://www.instagram.com/p/DDSYluRumiW/?igsh=YjJkb3gybWhxc3I4

Key dates for the coming week:

Tuesday: 08:00 Inflation data (DE)

Wednesday: 15:45 Interest rate decision BoC (Canada)

Thursday: 14:30 Interest rate decision (ECB)

What other important dates can you think of?

#inflation
#kanada
#boc
#ezb
#zinsen

UBS Seeks Expanded US Banking License in Growth Push

Bloomberg, 19.11.2024, 2 minutes

EN/DE

$UBSG (+1,8 %) is seeking a wider permission to operate in the United States, a market it has earmarked for growth.

The Swiss bank is considering applying for a license under the supervision of the Office of the Comptroller of the Currency, according to a spokesperson, who confirmed a Handelsblatt report. Such an approval would make it easier for UBS to make loans and take deposits across the nation.

Chief Executive Officer Sergio Ermotti has made expanding in the US wealth market a key part of his strategy beyond the immediate integration of Credit Suisse, which the bank bought last year. The takeover has beefed up UBS's US investment bank, which it plans to use to sign on entrepreneurs and rich individuals as clients for its private banking business.

UBS recently made a string of investment banking leadership changes following some senior departures as the Swiss lender seeks to bolster areas such as health care and leveraged finance, Bloomberg has reported.

The Zurich-based bank is a massive wealth management firm globally but lags the domestic competition in the US, where it operates through a network of more than 6,000 financial advisers who are not directly bound to the bank.

Chairman Colm Kelleher said last month that UBS will eventually look to buy a US wealth management firm, though that will only happen once the Credit Suisse integration is complete.

Happy Investing

GG

--------------

EN:

UBS seeks expanded US banking license for growth

Bloomberg, 19.11.2024, 2 minutes

DE/DE

UBS is seeking an expanded license to do business in the United States, a market it has earmarked for growth.

The Swiss bank is considering applying for a license under the supervision of the Office of the Comptroller of the Currency, a spokesman said, confirming a Handelsblatt report. Such a license would make it easier for UBS to lend and take deposits nationwide.

Chief Executive Officer Sergio Ermotti has made expansion in the U.S. wealth market a key part of his strategy, which goes beyond the immediate integration of Credit Suisse, which the bank bought last year. The acquisition has strengthened UBS's US investment bank, which it plans to use to attract entrepreneurs and wealthy individuals as clients for its private banking business.

UBS has recently made a series of leadership changes in its investment banking division after a number of senior hires left the company to bolster areas such as healthcare and leveraged finance, Bloomberg reports.

The Zurich-based bank is a massive wealth manager globally but lags domestic rivals in the U.S., where it works through a network of more than 6,000 financial advisers who aren't directly tied to the bank.

Chairman Colm Kelleher said last month that UBS will consider buying a U.S. wealth management firm, but not until the integration of Credit Suisse is complete.

Happy investing

GG

UBS
$UBSG (+1,8 %) Asset Management has launched the money market fund UBS USD Money Market Investment Fund Token (uMINT) in Singapore 🇸🇬, which uses Distributed Ledger Technology (DLT) from Ethereum
$ETH (-0,82 %) technology (DLT). This fund is aimed at institutional
investors and offers a modern digital approach to money market investing that enables faster transactions and lower management costs.

The decision to launch the fund in Singapore 🇸🇬 capitalizes on the favorable
regulatory environment in the country to attract institutional investors.

UBS emphasizes the stability and security of the fund through the integration of DLT, but also warns that support for the US-dollar due to the tightening monetary policy of global central banks and the efforts of the BRICS-countries to reduce their dollar dependency could dwindle. -cryptonews

$UBSG (+1,8 %) UBS generates billions in profit

The big bank exceeds analysts' estimates with its profit for the third quarter.

Cost-cutting and revenue growth have enabled UBS to post a quarterly result well above expectations. From July to September 2024, the big bank posted a profit of USD 1.43 billion, clearly exceeding analysts' average estimate of USD 740 million.

In the prior-year period, restructuring costs in connection with the Credit Suisse takeover had caused the wealth management giant to post a loss for the first time in six years. The high transaction volumes in the business with wealthy private clients and in investment banking led to an increase in income in the third quarter of 2024, although interest income fell, as UBS announced on Wednesday.

https://www.ubs.com/global/de/investor-relations/financial-information/quarterly-reporting.html

1. revenue development: UBS generated total revenues of USD 12.33 billion in the third quarter of 2024, an increase of 5% compared to the previous year, mainly due to higher fee and commission income and increased interest income.

2. profit growth: Net profit amounted to USD 1.43 billion, a significant increase compared to a loss of USD 715 million in the same quarter of 2023.

3. cost reduction: operating costs decreased by 12% to USD 10.28 billion, supported by reduced integration costs following the acquisition of Credit Suisse

4. capital ratio: CET1 capital ratio was 14.3%, which remained stable after a voluntary amortization of the remaining purchase price allocation adjustments of USD 3.4 billion.

5. cost/income ratio: The cost/income ratio fell to 83.4% (previous year: 99.5%), supported by higher income and lower integration costs.

6. integration of Credit Suisse: The integration is on track with cost savings of USD 6.8 billion in annualized terms by the end of 2024, towards a target of USD 13 billion by the end of 2026.

7. wealth management: UBS Global Wealth Management reported revenues of USD 6.2 billion in the quarter, supported by active client transactions and portfolio management fees.

---

Own position: 682 shares at ~14.07 CHF, mostly from the share program as a former employee. CHF 14.07 does not correspond to the real price, but is higher.

Shares will continue to be held, position to be gradually reduced from CHF 35.

Part 2:

The evolution of embedded finance: banks at a crossroads

Reading time: approx. 4 minutes

The emergence and growth of embedded finance have presented banks around the world with a strategic decision: Do they give up "simple" payments and payment processing and focus on more more complex services such as asset management, M&A and IPOs? Or do they continue to build the financial infrastructure to keep pace with fintechs and tech companies?

To grasp the deep understanding of embedded finance and the role of banks, we need to analyze the change in the financial world and the shift in power between traditional banks and tech giants.

Embedded finance: redefining the role of banks

Historically, banks have been banks were not only the main players in the provision of financial products, but also the sole point of access to these services. However, the digital revolution, led by tech giants and fintechs, has profoundly changed the relationship between bank and customer. Embedded financewhich enables the seamless integration of financial services into digital platforms, poses a major challenge for banks.

Technological platforms take over payment processing: Companies such as Stripe, Adyen and Square offer comprehensive payment infrastructures that enable platforms to offer financial services without the direct involvement of a bank. These companies are often faster, more flexible and, above all, cheaper than traditional banks.

Banks as infrastructure providersSome banks have opted to take on a strategic role in the background. They provide the infrastructure for payments and loans but leave the customer experience to the platforms. Examples of this are banks such as Hypothekarbank Lenzburgfintechs such as neon to offer banking services without having a banking license themselves.

Retreat into more complex services: On the other hand, there are banks that specialize in high-quality, advisory-intensive services such as asset management, IPOs and M&A transactions focus. These services require deep expertise, regulatory experience and trust - factors that tech companies struggle to replicate.

Which direction are banks taking?

Banks are faced with a strategic choice between (mainly) two models:

1.) Becoming an infrastructure provider:

Some banks no longer want to be the central interface to the customer, but focus on providing a robust infrastructure. BBVA and Goldman Sachs for example, have started to provide their infrastructure via Banking-as-a-Service (BaaS) to other companies. They provide platforms with the necessary financial tools without being in the foreground. The advantage: they can earn money from a growing number of transactions without competing directly with tech companies.

Advantages for the banks:

• Scalability: Banks can use their existing infrastructure more efficiently.
• Revenue through fees for providing payment and credit solutions to fintechs or other companies.

Disadvantages:

• Fewer direct customer relationships.
• Greater reliance on partnerships with tech companies.

2) Focus on advisory-intensive services:

Another group of banks is focusing on high-value financial servicesthat require personalized advice and specific know-how. The UBS is an example of this. By withdrawing from the mass business with simple payments and loans, it can concentrate on asset management and corporate finance where margins are higher and there is less competition from tech companies. The divestment of "Swisscard" to AmericanExpress may be an indication that UBS wants (or needs?) to focus on its core business.

Advantages:

• Higher margins for specialized services.
• Greater trust and long-term relationships with wealthy private clients and companies.

Disadvantages:

• Risk of losing bulk business and therefore volume.
• Dependence on high-end clients who scale back their assets or activities in times of crisis.

Technological change and competitive pressure

A key driver of this change is the technologization of the financial sector. APIs enable platforms such as Amazon, Airbnb or Shopifyto offer financial services without a bank in the foreground. These developments have not only made the banking market smaller, but have also put pressure on bank margins increased.

One example of the influence of embedded finance is the shift in credit and payment options. Klarna offers "Buy Now, Pay Later" (BNPL) models directly at the checkout of online retailers. Although the customer thinks they are paying the merchant directly, the actual credit processing takes place in the background via Klarna. The merchant receives their money immediately, and Klarna earns from the customer's installment payments. This underlines how tech companies have taken over the traditional model of the credit business without being a bank themselves.

Banks at a crossroads?

The future of banks will depend heavily on the strategic decisions they make. The The loss of direct customer contact in payment transactions through embedded finance is a challenge, but banks can use this change to either focus on infrastructure or high-value services specialize in either infrastructure or high-value services. However, both require massive investments in technologyto remain competitive.

In the next part of the series, we take a closer look at how the technologies behind embedded finance work and how banks and companies can use these systems efficiently to consolidate their position in the market.

Let me know what you think! - Leave a comment!

Happy investing! 😊

GG

$AXP (+0,43 %)
$UBSG (+1,8 %)
$ADYEN (+0,57 %)

BONUS:

The global embedded finance market in 2023 was estimated at USD 83.32 billion and is expected to grow at a compound annual growth rate of 32,8% further growth. This growth is due to the increase in smartphones and internet access worldwide.

Stay tuned, the series continues! ♥️🔥

$PYPL (+0,12 %)
$GOOGL (-0,8 %)
$GOOG (-0,82 %)
$AMZN (-0,24 %)
$PYPL (+0,12 %)
$AFRM (-0,59 %)

Today the inflation data is published, an overview of what the big players are saying:

• Bank of America
  $BAC (+0,95 %): 2.3%
• Barclays
  $BARC (+0,69 %): 2.3%
• BNP Paribas
  $BNP (+1,52 %): 2.3%
• Citigroup
  $C (+1,56 %): 2.2%
• Deutsche Bank
  $DBK (+1,08 %): 2.3%
• Goldman Sachs
  $GS (+0,62 %): 2.3%
• Jefferies
  $JEF (+1,6 %): 2.3%
• JP Morgan
  $JPM (+1,05 %): 2.3%
• Morgan Stanley
  $MS (+1,54 %): 2.3%
• Nomura
  $NMR (+0,9 %): 2.3%
• TD Securities
  $TD (+1,09 %): 2.3%
• Wells Fargo $WFC (+0,56 %): 2.3%

• UBS
  $UBSG (+1,8 %): 2.4%

Live coverage is of course exclusively available from me live on Getquin.

DBS Group: The best bank in the world?

Reading time: too long to start the clock

Part:1

Company presentation: $D05 (+0 %)
Bank Limited

DBS Bank Limited, originally founded as The Development Bank of Singapore Limited, is the leading financial services company in Southeast Asia and one of the largest banks in Asia. Headquartered in Singapore, DBS has assets of 739 billion Singapore dollars (as at end 2023). The bank offers a comprehensive range of services to retail, small and medium-sized enterprises (SMEs) and corporate clients and operates in 18 markets, including major regions such as Greater China, Southeast Asia and South Asia.

Historical development

DBS was established on July 16, 1968 by the Singapore government to take over the industrial financing functions of the Economic Development Board. Initially, the bank's focus was on financing Singapore's industrialization and the government's urban development projects. Over the years, DBS evolved from a pure development bank to a global financial services provider and adopted its current name in 2003, underscoring its transformation and international focus.

Business Model

DBS's business model is based on providing comprehensive financial services that include consumer banking, SME services and corporate finance. The bank is known for its innovation leadership in digital banking and has been recognized as the "World's Best Digital Bank" multiple times. DBS takes a "phygital" approach that seamlessly integrates physical and digital services to ensure high customer retention and increased profitability.

Core competencies

The core competencies of DBS include:

• Digital transformation: DBS has established itself as a leader in digital banking and continuously invests in advanced technologies to optimize banking processes and enhance customer experience.
• Strong market presence in Asia: With deep roots in Asian markets, DBS has an in-depth understanding of regional business dynamics which it leverages for sustainable growth.
• Customer focus: The bank's customer-centric strategy aims to comprehensively understand its customers' needs and offer customized solutions that go beyond standardized banking services.

Future prospects and strategic initiatives

DBS plans to further expand its presence in key markets such as China, India, Indonesia and Taiwan. The bank is focusing on a strategy that combines digital expansion with physical services to consolidate its market position and tap into new growth opportunities. In addition, DBS is investing in artificial intelligence and digital ecosystems to develop new business areas and improve the experience of its customers and employees.

Overall, DBS remains committed to further strengthening its position as a leading financial institution in Asia. Through the targeted use of emerging technologies and a focus on sustainable banking, the bank aims to meet both the current and future demands of the global financial market.

Insider

If you believe in the concept of "skin in the game", you might be disappointed with DBS. The board members together only hold around 0.28% of the shares, which is relatively small. On the other hand, there is no dilution, as there is hardly any stock-based compensation.

Shares held by board members:

• Li Ming-Nee-Ong Lee: 0.18%
• Piyush Gupta: 0.08%
• Lim Huat Seah: 0.01%
• Tse Ghow Lim: 0.01%
• Sai Choy Tham: 0%
• Tian Yee Ho: 0%
• Bonghan Cho: 0%
• Weng Kin Lim: 0%
• Punita Lal: 0%
• Judy Lee: 0%
• Hing Yuen Ho: 0%

Total percentage of board members:

0.18%+0.08%+0.01%+0.01%=0.28%0.18\% + 0.08\% + 0.01\% + 0.01\% = 0.28\%0.18%+0.08%+0.01%+0.01%=0.28%

In comparison, the top 20 investors hold a significant share of DBS:

Shares held by the top 20 investors:

• Temasek Holdings (Private) Limited: 28.74%
• The Vanguard Group, Inc.: 2.78%
• BlackRock, Inc.: 2.24%
• Capital Research and Management Company: 1.96%
• Government Pension Fund Global: 1.44%
• Norges Bank Investment Management: 1.44%
• JP Morgan Asset Management: 1.31%
• Massachusetts Financial Services Company: 1.08%
• Vanguard STAR Funds - Vanguard Total International Stock ETF: 0.98%
• Capital Income Builder: 0.76%
• Harding Loevner LP: 0.61%
• Geode Capital Management, LLC: 0.60%
• Harding, Loevner Funds, Inc. - International Equity Portfolio: 0.60%
• Vanguard Tax-Managed Funds - Vanguard FTSE Developed Markets ETF: 0.59%
• Franklin Resources, Inc.: 0.55%
• Davis Selected Advisers LP: 0.54%
• abrdn plc: 0.51%
• Schroder Investment Management (Singapore) Ltd: 0.51%
• State Street Global Advisors, Inc.: 0.51%
• New Perspective Fund: 0.50%

Total share of the top 20 investors:

28.74%+2.78%+2.24%+1.96%+1.44%+1.44%+1.31%+1.08%+0.98%+0.76%+0.61%+0.60%+0.60%+0.59%+0.55%+0.54%+0.51%+0.51%+0.51%+0.50%=51.24%28.74\% + 2.78\% + 2.24\% + 1.96\% + 1.44\% + 1.44\% + 1.31\% + 1.08\% + 0.98\% + 0.76\% + 0.61\% + 0.60\% + 0.60\% + 0.59\% + 0.55\% + 0.54\% + 0.51\% + 0.51\% + 0.51\% + 0.50\% = 51.24\%28.74%+2.78%+2.24%+1.96%+1.44%+1.44%+1.31%+1.08%+0.98%+0.76%+0.61%+0.60%+0.60%+0.59%+0.55%+0.54%+0.51%+0.51%+0.51%+0.50%=51.24%

The top 20 investors therefore hold a total of 51.24% of the shares in DBS Group Holdings Ltd, which represents a significant concentration of capital.

Share performance

Over the year, DBS shares are up 25.45%, which is remarkable, especially given the current challenges in the Asian region. Since the IPO, the share price has risen by 518%, which is a rather moderate performance compared to other large financial institutions. However, it is important to remember that historical performance does not necessarily reflect future performance.

Turnover distribution

A significant proportion of around 75% of revenue comes from interest income, indicating a clear need for diversification. This heavy reliance on interest income makes DBS vulnerable to fluctuations in the interest rate markets and it may make sense to diversify its revenue streams to increase long-term stability.

(Image )

The numbers

Since 2020, DBS's key figures have shown a solid upward trend: turnover, net profit and diluted earnings per share (EPS) have risen continuously, accompanied by only minimal dilution. In addition, further shares were issued as part of a special dividend, which is essentially equivalent to a capital increase. In balance sheet terms, these funds were booked as new subscribed equity and in the capital reserve, which further strengthens the financial basis of DBS.

Margin development

DBS's profit margin has risen steadily in recent years, underlining the company's efficiency and profitability. The free cash flow (FCF) margin has also recovered well after a decline, indicating improved liquidity and stronger cash generation. This positive development strengthens DBS's financial flexibility and creates scope for further investments and distributions to shareholders.

(Image )

Balance sheet

A look at the asset structure shows: Total investments account for around a quarter of total assets. The comparatively low proportion of equity is striking, although this is often the case with banks. However, it is pleasing to see that this is growing steadily from year to year.

(Image )

Cash flow

The financial situation is currently encouraging: DBS has positive cash flows. However, caution is advised as this situation can change rapidly. It is worth noting that the free cash flow has been solidly positive again for two years now.

(Image )

The company's dividend policy is proving to be extremely shareholder-friendly. Investors can currently look forward to an attractive dividend yield of 6%. With a payout ratio of around 50%, the company strikes a good balance between profit sharing and reinvestment. In addition, it carries out share buybacks on a modest scale. The special dividends of the past two years deserve special mention. These were exceptionally high, which is impressive at first glance. However, it should be noted that these generous distributions were accompanied by a capital increase. As a result, the actual capital outflow was limited - an important aspect when assessing the company's financial stability.

(Image)

The DPS is on the rise and the P/E ratios have fallen steadily in recent years.

(Image )

KPI

(Image )

The company's key figures present a differentiated picture. The return on equity (ROE) stands out positively and demonstrates an efficient use of equity, which is mainly due to the fact that the company has little equity.

However, there are clear weaknesses in other performance indicators, which could initially give rise to skepticism. However, it is important to consider these figures in the context of the banking sector. In this comparison, the company performs quite respectably. The specifics of the sector, such as strict regulations and the challenging interest rate environment, set natural limits to profitability. Against this backdrop, it can be said that the investment in this financial institution has proven to be sound. It is clear that a differentiated view, taking into account sector-specific characteristics, is essential in order to recognize the true value of this investment.

There seems to be a limit to the number of pictures, so let's move on to the next part. @christian and by the way we can see if the pictures work again.

Part 2: https://getqu.in/luwqQR/

$JPM (+1,05 %)
$DBK (+1,08 %)
$HSBA (+2,61 %)
$BAC (+0,95 %)
$UBSG (+1,8 %)

UBS exceeds expectations with profit figures

Article from FuW. I'll take a closer look at the figures later. 😊

Article approx. 3min reading time.

$UBSG (+1,8 %)

https://www.fuw.ch/ubs-uebertrifft-bei-gewinnzahlen-die-erwartungen-quartalszahlen-346852935408

The $UBSG (+1,8 %) removes legacy issues from the world

UBS has announced that it will make a redemption offer to investors in the liquidated Greensill funds. Investors can receive 90% of the net asset value per unit as of February 25, 2021, less any payments already received. The offer will run until July 31, 2024 and will be funded by the purchase of units of the feeder sub-funds. UBS does not expect any material impact on its financial result or Common Equity Tier 1 ratio as provisions have already been made.

The Greensill case is one of the more prominent "skeletons in the closet" of the former Credit Suisse.

Read more in the original article (free):

CS-Altlast: UBS macht Investoren der Greensill-Fonds Rücknahmeangebot | Finanz und Wirtschaft (fuw.ch)

I like the way Ermotti and his team are handling the matter and continuing to build confidence. I remain positive about the share. I like the management, wealth management is going well, major clients rely on the bank & the dividend policy (progressive) gives hope for a lot. At the beginning of February 2024, the big bank also announced that it would start buying back shares again in the second half of 2024. In the current year 2024, there was talk of up to 1 bn. (~1.5% of the outstanding shares currently).

Happy investing

GG

(Not a fan of forum spamming myself, so take a break! 💕)