Norway’s sovereign wealth fund becomes largest shareholder in UBS

Norway’s sovereign wealth fund, Norges Bank Investment Management (NBIM), has emerged as the largest shareholder in UBS, the Swiss banking giant.  

Norway’s sovereign wealth fund, Norges Bank Investment Management (NBIM), has emerged as the largest shareholder in UBS, the Swiss banking giant. 

The fund, which oversees the world’s largest sovereign wealth portfolio valued at $1.4 trillion, increased its stake in UBS to over 5% this month. This development comes as UBS strives to convince international investors of the merits of its historic takeover of Credit Suisse. 

NBIM has been a shareholder in UBS for nearly two decades but has now significantly expanded its holdings, surpassing other top investors in the bank such as Dodge & Cox and BlackRock. 

UBS has been under pressure to demonstrate its ability to execute the $3.4 billion state-backed rescue of its former rival, Credit Suisse. Many prominent fund managers have been closely monitoring UBS’s handling of the complex integration process and when it intends to resume shareholder returns. 

Colm Kelleher, who became UBS Chairman 18 months ago, has been focusing on courting large, primarily American active fund managers to narrow the bank’s valuation gap with its peer on Wall Street.  

Currently, UBS trades at just over 1x its book value.  

UBS reported substantial profits in its second-quarter results, primarily driven by an accounting gain related to the Credit Suisse acquisition. 

Analysts are now speculating that UBS may resume share buybacks next year, a program that was paused when the bank agreed to purchase Credit Suisse. Both UBS and NBIM have declined to comment on the matter. 

NBIM’s increased stake in UBS underscores its continued interest in the Swiss banking sector and its strategic investments in the European financial landscape. 

Read more: https://www.ft.com/content/5105fd2b-9312-4647-9ada-2bbdb87e50b9