UBS Wealth Reports Record Revenues, Productivity, And Is Not For Sale: CEO

UBS Wealth Reports Record Revenues, Productivity, And Is Not For Sale: CEO

UBS Wealth Management Americas reported record revenues and advisor productivity for the quarter, just some of the reasons CEO Sergio Ermotti says the business is not for sale.

Contrary to rumblings earlier this year, UBS will not be selling its U.S. wealth management unit, Ermotti said in an earnings call Monday, noting the Swiss-based parent sees these operations as a strong business. 

“This business, with the most productive advisors in the industry, in the largest market in the world, and as part of the leading wealth management franchise globally, is critical to our strategy and to our growth prospects,” Ermotti says. “So it's not hard to see why this strong business, with its strategic and financial importance, looks attractive to our competitors, but it’s worth even more to UBS and its shareholders and that’s why it's not for sale.”

Overall, the bank reported profits during the second quarter soared by 53 percent, rising to 1.21 billion Swiss francs ($1.26 billion), up from the 792 million francs reported a year prior.

UBS announced its earnings a day early in order to “counter certain incorrect and misleading information that has become public," spokesman Gregg Rosenberg said Monday. A local Swiss newspaper published a report Sunday that included second-quarter figures that were inaccurate.

Here are the key takeaways on the U.S. wealth management operations:

  • UBS Wealth Management Americas reported record revenues for the second quarter, up 3 percent from the previous year to $1.95 billion.
  • Yet despite the uptick in operating income, the unit’s adjusted pretax profit declined to $231 million from $293 million reported the previous quarter. Rosenberg said this was due to higher charges for provisions for litigation, regulatory and similar matters and other provisions.
  • Invested assets were $1.04 trillion, down slightly from the $1.05 trillion reported during the first quarter, but up 3 percent from the $1.02 trillion reported a year ago. The decline quarter over quarter, Rosenberg said, reflects the negative market performance.
  • Revenue per advisor also hit a record $1,118,000 up 3 percent from $1,088,000 reported last quarter. Rosenberg reported it was driven by a 2 percent increase in income.
  • UBS’ advisors also have about $150 million in invested assets per advisor, up from the $143 million reported a year ago.
  • The firm lost over 30 advisors over the past quarter, down to 6,948. Yet Rosenberg noted that the headcount remains within UBS’ “strategic range,” and added that approximately 60 percent of the advisors who left the firm last quarter were in the bottom half of its advisor force.
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