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UBS Group AG is retreating from its South African investment-banking operations after laying off most of its dealmakers in the country, according to people familiar with the matter.
Around eight bankers have left the firm’s office, which also covers some of sub-Saharan Africa, the people said, asking not to be named because the information is private. The bank now plans to cover its key corporate clients in the region out of London, they said.
"We remain committed to our business in South Africa and retain a significant presence in the region," said a UBS spokesperson, noting that the investment bank in nation won’t be closed entirely.
The investment bank is following a conservative approach and is in downsizing mode, said the people. UBS plans to keep some capabilities in the country, including research and trading, they said. Credit Suisse Group AG made a similar move, when it cut back on its investment banking capacity and exited South Africa in 2018.
UBS had restructured its dealmaking teams globally in 2019 when it elevated Javier Oficialdegui and Ros Stephenson to co-lead investment banking, which includes advising on corporate takeovers and raising funds through stock and bond sales.
The Swiss lender said in October that fourth-quarter profit will be hurt by reduced client activity. The bank’s surprise jump in profit in the last quarter was fuelled by wealth-management fees rising the most in three years. It’s investment banking revenues surged by 78% in the third quarter from a year earlier, helping to lift the unit’s pretax profit to the highest in several years.
UBS’s pivot to wealth management over the past decade has left it with a smaller investment bank than U.S. rivals but one that has maintained high levels of profitability.
