UBS buys Schwab capital markets unit

Swiss-based banking group UBS has agreed to buy Charles Schwab's capital markets unit for $265 million in cash.

Swiss-based banking group UBS has agreed to buy Charles Schwab's capital markets unit for $265 million in cash.

UBS said it would integrate the unit, which comprises equities trading and sales and Schwab's Nasdaq trading system, into its investment bank. The unit matches buyers and sellers in more than 11,000 stocks and handles more than 200 million shares a day of trading volume.

The deal is the latest in a string of pinpoint purchases that has seen UBS strengthen its core activities in investment banking and wealth management. Analysts have said that the deal is too small to transform UBS in any significant way.

The sale came less than eight months after Schwab, the largest US discount brokerage, bought the business, now known as Schwab SoundView Capital Markets, for $321 million.

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UBS said the transaction included an eight-year services agreement for the handling of Schwab's equities and listed options orders. It expects the transaction to close within 60 days.

Last week, UBS said it had bought 50 per cent of Russian equity broker Brunswick UBS from Brunswick Capital, giving it full ownership of the Moscow-based investment bank.

UBS has also bought the German wealth management division of Merrill Lynch, the French activities of Lloyds TSB, and UK wealth managers Laing & Cruickshank and Scott Goodman Harris.

The deals helped increase UBS's assets under management to $1.75 trillion at the end of June.