UBS, Sumitomo Mitsui Trust wealth deal to be signed Friday: memo

FILE PHOTO: A man walks past a UBS logo projected on a screen in Singapore, January 14, 2019. REUTERS/Feline Lim

ZURICH (Reuters) - Swiss lender UBS and Japan’s Sumitomo Mitsui Trust will sign a deal on Friday establishing a new wealth management tie-up in Japan, an internal memo seen by Reuters showed.

The deal, to be signed by the banks’ CEOs in Zurich, will create a joint venture majority-owned by UBS to expand both firms’ offerings for wealthy and ultra-wealthy customers, the memo sent to UBS’s Japanese staff on Thursday said.

“We will establish a joint venture, 51 percent owned by UBS, that will offer a menu of products and services that is more comprehensive than we or SuMi Trust is currently able to deliver on our own,” UBS Japan Country Head Zenji Nakamura said in the note.

“This new tie-up will create Japan’s first-ever ‘one-stop shop’ for all the wealth management needs of high net worth and ultra high net worth individuals.”

UBS declined to comment, while Sumitomo Mitsui (SuMi Trust) could not immediately be reached for comment.

UBS, the world’s largest wealth manager, has recently faced stalled earnings in its flagship business managing more than $2.4 trillion for the world’s rich as clients stock up on cash and shy away from trading amid geopolitical uncertainty.

Chief Executive Sergio Ermotti earlier on Thursday said the Swiss bank was looking to boost tie-ups with local players outside of Switzerland to support the business’ growth.

The deal between UBS and the Japanese trust bank should help both banks boost “wallet share” with existing clients and attract new customers, Nakamura said in the memo, adding a substantial portion of the Japanese lender’s 285 trillion yen ($2.63 trillion) of assets under custody hailed from wealthy customers who would be referred to the new company.

UBS clients will get access to the Japanese bank’s real estate and trust services, while Sumitomo Trust clients will get access to UBS’ wealth management offerings including securities sales and trading, research and advisory capabilities, he said.

Reporting by Brenna Hughes Neghaiwi; Editing by Mark Potter