Pulling out the key points from UBS's fourth-quarter earnings this morning, the following highlights from the largest wealth management firm globally point to some trends for the industry as a whole. Chiefly, Asia remains the growth engine for new client assets for the global banks and income is still being tested by increased expenses.
UBS's recovery in the US has slowed a little, indicating much of the money that has been moving among clients in the US has now found its home. Hiring is continuing, but at a slow pace.
Here is a round-up from the full report:
Key indicators: Q1 2014 vs Q1 2013
Profit: SFr619 million vs SFr664 million
Cost/income ratio: 68.2 vs 64.9
Net new money growth: 4.9% vs 7.3%
Number of client advisers: 4,220 vs 4,162
Regional breakdowns:
- UBS Americas net new money has slowed to $2.1 billion. The growth rate was 0.9% for the quarter, missing the company's target range of 2% to 4%;
- Wealth management overall (excluding Americas) saw a net new money increase of 4.9% on the upper range of targets – SFr10.9 billion. Switzerland, emerging markets (EMs) and Asia Pacific took in the most money and had the highest growth rate, although Switzerland's boost came from service upgrades from clients in other areas. SFr5 billion came from Asia and SFr3.3 billion from EMs;
- Europe saw one big outflow from one client that resulted in a net outflow of SFr2.2 billion for the quarter from the region.
Elsewhere in the firm:
Investment-banking profits for the first quarter came in at SFr425 million versus SFr977 million Q1 2013, but was better than the fourth quarter last year. Operating income was SFr2.19 billion up from SFr1.86 billion for the previous quarter, but down on last year’s first quarter of SFr2.78 billion. The investment-banking business has 684 fewer employees than in the first quarter last year, but has added 245 since the last quarter.
In global asset management, performance fees took a hit this quarter, dropping to SFr47 million from SFr72 million last quarter and SFr53 million in Q1 2013. Profits were slightly down on the previous quarter at SFr122 million.
