UBS Cashes in on Steady Wealth Business

UBS Cashes in on Steady Wealth Business

UBS’ global wealth management business reported its best quarterly result since 2008 on Tuesday, with its U.S. arm generating record profits.

UBS's net profit soared 88 percent and handily beating forecasts. The robust quarter seemed to justify the Swiss bank's decision to strengthen its focus on its wealth management business, while running a leaner investment bank. Here are the highlights:

  • Overall, UBS’ global wealth management operations took in a record adjusted before tax profit of CHF 856 million ($922 million) in the first quarter, largely as a result of higher transaction-based income.
  • In the U.S., Wealth Management Americas reported an adjusted pretax profit of $293 million in the first quarter, up 3 percent from the previous record of $284 million reported a year ago and up 26 percent sequentially.

  • Operating income for the unit came in at $1.9 billion for the first quarter, up 2 percent from the $1.87 billion reported a year ago and down slightly from the $1.92 billion reported in the fourth quarter. UBS attributed the decrease in revenue to lower transaction-based revenue, mainly due to three less trading days.
  • Net new money was $4.8 billion and invested assets hit a record $1.05 trillion for the quarter, up 6 percent from the $987 billion reported a year ago.

  • Advisor productivity remained flat sequentially, with UBS reporting revenue per advisor was about $1.09 million in the first quarter, up 5 percent from the $1.04 million reported a year ago.
  • Invested assets per advisor hit a record $150 million, up 2 percent from $147 million in the previous quarter, and up 8 percent from $139 million reported a year ago.  UBS spokesman Gregg Rosenberg said while not all firms report this metric, by the firm’s calculations UBS has the highest revenue per advisor and invested assets per advisor.

  • The record invested assets per advisor comes as UBS reported an almost 2 percent decrease in the firm’s advisor headcount over the past year. At the end of the first quarter, UBS had 6,982 advisors, compared to the 7,113 advisors at the firm a year ago and 6,997 last quarter.
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