HSBC takeover rumours boost UBS shares

Tuesday, 24 June 2008 12:00

Rumours HSBC could announce a takeover for UBS sent shares in the Swiss bank higher in morning trading.

UBS stock rose almost four per cent this morning on speculation HSBC is planning an $80 billion (£40.7 billion) bid for the bank.

Shares in UBS shares were up 1.99 per cent at CHF22.50 (£11) by 12:24 BST, ahead of a 0.5 per cent rise in the European banking sector index.

Both banks have declined to comment on the rumours.

In addition, UBS said it has agreed to buy Dutch wealth management company VermogensGroep for an undisclosed price.

VermogensGroep serves wealthy private clients, foundations and institutions in the Dutch market with client assets of approximately ?4 billion (£3 billion) and an additional ?10 billion (£8 billion) assets under administration, UBS said.

UBS was the biggest European casualty of the credit crunch with over £19 billion in mortgage write-downs.

Analysts believe more is yet to come when the bank announces its second quarter earnings in August.

The bank is attempting to return to profitability by expanding into more lucrative regions as the Swiss market slows.

Juerg Zeltner, spokesperson for UBS, said: "This will enable UBS to service the Dutch market for wealthy individuals with immediate scale and the unique wealth control solution of VermogensGroep."

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