UBS’ private bank in Asia increased its profits by more than a quarter on the year. The surge masks a more mixed underlying result as finews.asia found when looking beneath the surface.
The Swiss bank's pretax contribution from its Asian private bank rose 27 percent on the year to 1.126 billion Swiss francs ($1.15 billion), UBS said in a statement on Monday. The report is the first official one since UBS sewed up its U.S.-based brokerage arm – formerly known as Paine Webber – with its wider private bank in Asia, Latin America, and other fast-growing wealth markets.
UBS, which is based in Zurich, logged net new assets of 6 billion francs in Asia, down from the 10.1 billion francs reported in the last quarter of 2017. This fed into a 6 percent rise in assets in the region, a sharp drop from growth rate of almost a third in the second half of 2017. At the end of the first quarter of 2018, UBS' Asian private bank managed 379 billion francs.
New Hires
The mixed reading is set against the hiring of 40 private bankers during the period. UBS' Asian wealth arm, which is led by veteran Edmund Koh, now employs 1,077 client advisers in Asia. Investors will be watching closely to see whether the new hires translate to better net new money figures in coming quarters.
The drop in net new money notwithstanding, UBS dramatically improved its cost-income ratio – or what it spends set against the income it earns – to 55 percent in the region, from 67 percent in the prior quarter.
New Platform
The bank launched a new operating platform for its private bank in Hong Kong and Singapore last year. The last major puzzle piece in its 1 billion franc infrastructure project, the tech upgrade is meant to make private bankers respond to clients faster.
The bank said it had spent the first 80 days following the private bank merger with integrating business, support and control divisions as well as setting up an office for client strategy and merging tech plans. UBS said it is looking at what synergies it might reap from the move further out. Asia remains a key priority, both in terms of winning a larger share of the ultra-wealthy business as well as banking China's wealthy.
