10 Best Global Stocks To Buy Now

8. UBS Group AG (NYSE:UBS)

Number of Hedge Fund Holders In Q2 2024: 33

UBS Group AG (NYSE:UBS) is a diversified Swiss bank with a presence in wealth management, asset management, investment banking, and corporate and personal banking. The firm became quite crucial to global financial stability in 2023 when it bought out the assets of distressed Swiss bank Citibank. Citibank was UBS Group AG (NYSE:UBS)’s largest competitor in the Swiss market and the bank was able to buy its rival for an unbelievable 80% discount. The deal appears to have come just in time for UBS Group AG (NYSE:UBS), as lower rates are expected to also lower revenues for banks while also helping them in the form of lower costs. However, as it brings Credit Suisse’s assets under its portfolio, UBS Group AG (NYSE:UBS) is experiencing growth. During Q1, it reported $1.8 billion in profit which was more than 3x of analyst estimates of $598 million. As of H1 2024, UBS Group AG (NYSE:UBS)’s wealth management assets jumped by 3% to $54 billion and the bank can see additional tailwinds from the Credit Suisse deal in the future. Yet, it could also impact the income statement if UBS Group AG (NYSE:UBS)’s capital requirements are also increased.

The global banking sector has been in a tussle with regulators for Basel III regulations. Here’s what UBS Group AG (NYSE:UBS)’s management had to say on this front during the Q2 2024 earnings call:

“So on Basel III final as mentioned, we still expect $25 billion impact is 5% of risk-weighted assets, so in that range. As you mentioned, we guided in the fourth quarter in our investor update that $15 billion is in the core, $10 billion is in non-core. I think for now, that split remains pretty robust in terms of how we’re thinking — how we’re seeing it, and actually we’ll continue to work down the NCL portfolio to make that impact lessened over time. In terms of the NII guidance for P&C, just to — you asked for clarity on — it is in Swiss francs, so we’re guiding in Swiss francs. We’ll offer both in the future to sort of help. As I mentioned, in 3Q, we see a low single-digit down in Swissy, but flat sequentially in USD.

And as I mentioned, I think that’s a good outcome that we’ve had a number of headwinds that we’ve been working through sort of reaffirm the guidance for the full-year is also a function of some management actions that have been taken, including some loan repricing actions that have helped. So those are the drivers of the NII guidance for P&C.”