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UBS selling trade finance arm
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December 7, 1998: 6:36 a.m. ET
Swiss bank says $5.5 billion division is not part of its core business
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LONDON (CNNfn) - Swiss banking giant UBS plans to sell its global trade finance unit because it doesn't fit within the company's aim to focus on investment banking.
Following a review of its investment banking arm, Warburg Dillon Read, a UBS source confirmed to CNNfn that the banking group's intention was to sell the unit.
The trade finance division provides exporters with loans, letters-of-credit, electronic- banking, currency-clearing and risk-hedging services, and is a business that has been hit hard by economic crises in Asia and Russia.
The only official statement UBS would make was to confirm that it is reviewing plans for the division. "WDR is exploring a range of alternatives. These are still at an early stage," a company spokeswoman told CNNfn.
The company reportedly held sales talks in London last week.
The bank has not yet put a price on the business which has a loan book of $5.5 billion and employs 600 people. It is reportedly willing to consider a joint venture with another bank.
UBS does not consider global trade finance as a core sector of its business, the reports quoted an internal company strategy document as saying.
The review, triggered by the merger of UBS and Swiss Banking Corporation earlier this year, concludes that trade finance is too close to mainstream banking to remain within WDR.
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