UBS Group has terminated its contract with BlackRock’s Aladdin technology platform, a multimillion-dollar agreement inherited from Credit Suisse, reported Bloomberg.
This move is part of UBS’s ongoing integration of the asset management operations of its former competitor.
The decision to end the contract was made earlier this year. UBS is currently in the process of transferring key components, including numerous Credit Suisse funds, to its own systems.
The bank aims to complete this transition by the end of the current year, the report said.
UBS management has indicated that the removal of outdated IT and associated infrastructure is essential for enhancing shareholder value following the acquisition of Credit Suisse.
The Aladdin contract, which began in 2019, generated revenue estimated between SFr50m and SFr100m (approximately $126m) since its inception, according to sources who requested anonymity due to the sensitive nature of the information.
UBS’s asset management division has been facing challenges due to declining revenues linked to reduced management fees.
This situation complicates efforts to decrease operating costs, including through workforce reductions.
The combined asset management units manage assets totalling $1.8tn and reported a pretax profit of $135m for the first quarter of the year.
Aleksandar Ivanovic assumed leadership of the division in January 2022 following the retirement of Suni Harford.
Subsequently, the bank restructured its leadership to streamline product offerings and cut costs, as outlined in an internal memo from Ivanovic.
Aladdin, which stands for asset, liability, debt, and derivative investment network, offers trading, risk management, and portfolio management tools widely utilised by major money managers, pension funds, and corporate treasurers.
BlackRock’s CEO Larry Fink has prioritised technology in his strategy for the firm, which is looking to expand beyond public markets.
The annual revenue of BlackRock’s technology services division, which includes Aladdin, has increased by 45% to $1.6bn from 2020 to 2024.
“UBS terminates Aladdin contract with BlackRock” was originally created and published by Private Banker International, a GlobalData owned brand.
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