UBS is damned to increase its customer base in Switzerland if it wants to maintain the current density of branches in the home market, UBS Switzerland boss Lukas Gaehwiler says. The growth potential however seems rather limited.

Lukas Gaehwiler, head of UBS in Switzerland, knows his division will need to deliver if he wants to avoid wielding the axe: the customer base in the home market of the country's biggest bank has to increase by 30 to 50 percent within ten years, he told «Tribune de Genève» newspaper recently.

The bank's network of about 300 branches nationwide will only be sustainable with an expansion of that magnitude, the manager added, reiterating plans he made public at the end of last year.

Small Acquisitions of Limited Interest

How he wants to achieve this ambitious target remains unclear. About 90 percent of the Swiss retail business is divided up between UBS, Credit Suisse, Raiffeisen and cantonal banks, such as Zuercher Kantonalbank. To buy a bank outside this small circle was of «limited interest» to UBS, according to the manager.

UBS also wants to expand its business in private banking, where the number of potential takeover candidates is bigger. Some 250 financial services companies vie for the offshore business, with 10 billion francs or less under management  – most of them are based in or around Geneva.

Slowing Growth Dynamic

But again, acquiring 10 billion doesn't make much sense, Gaehwiler said. UBS alone attracts some 40 to 50 billion francs in new money each year, while takeovers inherently remain risky affairs.

The world's biggest asset manager therefore concentrates on growing organically. UBS in 2015 however displayed some problems on that front, attracting far less new assets than a year earlier.

Acquisition in the Pipeline?

The institute received 30 billion francs in net new money last year, about half the amount it attracted in 2014. The ever more important Asian business also cooled slightly and the current year didn't start promisingly. UBS expects a tough year.

It wouldn't surprise if UBS were to acquire a big rival or several smaller institutes. So far, it has held back, very much unlike Julius Baer or Union Bancaire Privée.

A notable exception was the acquisition in November of the Italian wealth management unit of Santander with some 3 billion francs in assets.