The wealth-management unit attracted CHF3.1 billion of new client money during the quarter, with net inflows in Asia-Pacific, emerging-markets and ultra-high-net-worth clients worldwide, the bank said in a statement.
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The Swiss bank’s separate Americas wealth division made CHF114 million, contrasted with a CHF32m loss a year ago, and attracted CHF1.9 billion of net new money in the fourth quarter.
For the full year, pre-tax profits at the Swiss bank’s wealth management division rose by 16% year-on-year to CHF2.7 billion. The bank’s Americas wealth division posted full-year profit of CHF504 million, representing a turnaround from a loss of CHF130 million in 2010.
During the fourth quarter, offshore customers withdrew some CHF1.8 billion from UBS’ core Swiss private banking business. The rate of net new money also continued to fall.
As a result of the overall disappointing performance, the bank has cut the bonus pool for employees as a whole by 40%, and that of the investment bank by 60%.
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By GlobalDataMoreover, UBS also warned that business in the coming three months would likely disappoint because of the ongoing eurozone debt crisis.
The downbeat forecast could mean potential jobs cuts particularly in struggling investment banking division, but even wealth divisions won’t go unscathed as the division’s profit were well short of expectations and also continue to see massive withdrawal of money by offshore clients.
Impending tax treaty with US and other countries could further jolt the private banking business WealthInsight believes.
UBS may also have to deal with mass departure of senior bankers following the sharp cuts to the bonus pool, which could adversely impact their profit-making private banking business.
The group posted net income of CHF393 million for the fourth quarter of 2011, compared to CHF1.7 billion a year ago. For the full year, net profits amounted to CHF4.23 billion, compared with CHF7.53 billion in 2010.
