UBS’s wealth management units have buoyed the
beleaguered Swiss bank’s third quarter results after it was forced
to write-off CHF1.85bn in connection with the $2.3bn in
unauthorised trades at its UK investment bank.

UBS’s wealth management division, which
includes its Swiss and international wealth management businesses,
reported pre-tax profit of CHF888m ($1bn) for the third quarter of
2011.

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Pre-tax profit at the bank’s wealth management
arm was driven by the CHF433m profit from the sale of
treasury-related investments at the wealth management and Swiss
bank division.

 

Pre-tax decline on adjusted
basis

However, UBS’s pre-tax profits declined by 20%
on a quarter-by-quarter basis to CHF540m from CHF672m on an
adjusted basis.

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This adjustment took into account the CHF85m
deduction from restructuring charges, as part of UBS’s group wide
cost cutting efforts, and the CHF433m profit from the sale of
treasury-related investments.

Invested assets – the most commonly quoted
figure for AuM at UBS – stood at CHF719bn in its international
wealth management and Swiss bank divisions, down 4% from the second
quarter, and CHF651bn in its American unit.

 

Slipping net new money

Net new money at UBS’s Swiss and international
wealth divisions declined to CHF3.8bn as at 30 September 2010,
compared with CHF5.6bn for the second quarter.

Clients’ money outflows reached CHF100m at the
Swiss-based wealth arm at UBS, with the bank’s international
operations gathering in CHF3.9bn in the third quarter – a decline
compared with CHF5.5bn in the quarter ending 30 June.

Asia-Pacific and the emerging markets (Latin
America, Middle East and Africa, Central & Eastern Europe and
Turkey) were the only sources of new money inflows, bringing the
bank CHF1.8bn and CHF3.5bn respectively.

The cost-income ratio for the Swiss and
international divisions reached 59% in the third quarter, compared
to 64% for the second quarter.

 

American business at UBS
booming?

The Swiss banking giant’s Americas wealth
business reported a CHF139m pre-tax profit for the third quarter –
a marginal decline, compared with CHF140m in the second
quarter.

However, the pre-tax profit almost tripled on
a year-on-year basis, compared to the CHF47m loss as at 30
September 2010.

Its Americas business also enjoyed net new
money growth of CHF4bn, compared with CHF2.6bn in the second
quarter; and CHF0.3bn for the third quarter a year ago.

The cost-income ratio at its Americas unit
grew marginally to 89.1% as at 30 September.