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October 30, 2012updated 04 Apr 2017 3:32pm

UBS Q3: new assets inflows “highest in 5 years”

UBS’ wealth divisions saw improved results in the third quarter as its wealth management unit’s pre-tax profit increased by over 20%, from CHF502m ($513m) to CHF600m ($642m) in three months.

By Elsa Buchanan

UBS’ wealth divisions saw improved results in the third quarter as its wealth management unit’s pre-tax profit increased by over 20%, from CHF502m ($513m) to CHF600m ($642m) in three months.

Its wealth management Americas unit delivered a third consecutive record quarterly pre-tax profit, up 9% to $230m.

The wealth management division recorded a 3% increase in its total operating income, to CHF1.78m from CHF1.73m, mainly reflecting a rise in recurring fees on higher invested assets.

UBS’s strong performance in its core wealth management business has failed to shore up its ailing investment bank.

 

Reshaping strategy will lead to losses

The Swiss bank has announced a radical overhaul of its investment bank which could include up to 10,000 job cuts as it focuses on its role of supporting UBS’s wealth management business.

Its investment unit will be slimmed down to focus on advisory, research, equities, FX and precious metals and by exiting business lines, predominantly fixed income.

UBS said it is investing CHF1.5bn across all of its business divisions as part of its reshape of its investment bank and is expecting group-wide efficiencies targeting incremental CHF3.4bn annual cost savings with total savings of CHF5.4bn by 2015.

 

 

Net new money of CHF12bn

UBS achieved its highest third-quarter net new money (NNM) inflows in its wealth management businesses in five years, with combined NNM inflows of more than CHF12bn in wealth management businesses.

Wealth management attracted NNM inflows of CHF7.7bn, compared with CHF9.5bn in the previous quarter, with strong inflows from Asia-Pacific, emerging markets and ultra high net worth clients globally.

Wealth management Americas achieved inflows of $4.8bn driven by inflows from the banks’ existing advisor force.

 

 

Invested assets climb 4.5%

Global invested assets rose to CHF1.6trn in Q3, from CHF1.5tr in Q2 across the two wealth management divisions.

Of the invested assets, CHF816bn were attributable to wealth management -which rose 4%, or CHF33bn on a three-months-basis primarily due to positive market performance and strong net new money inflows- and CHF783bn were attributable to wealth management Americas.

Investment fund fees increased by CHF36m to CHF907m, mainly in wealth management due to higher client activity and increased average invested assets.

The gross margin on invested assets was unchanged at 89 basis points and remained below UBS’ target range of 95 to 105 basis points as the 3% increase in income was offset by a 3% increase in the average asset base.

wealth management Americas saw a gross margin on invested assets up 1 basis point to 80 basis points.

 

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