Page 1 of 2

The UBS result reveals how slowly the bank is growing. It is now betting on wealth management and Iqbal Khan to boost the business. Here's a list of problems that Khan needs to solve.

1. Growth or Payouts?

UBS lowered its sights for 2022 – but not for its main wealth arm. Co-heads Tom Naratil and Iqbal Khan are to lift pre-tax profit by ten to 15 percent annually. Going by last year, the targets begin to look ambitious: net profit rose just four percent, hit by margin pressure.

The pattern repeats in the whole bank, geared strongly towards private banking. UBS recorded an 0.5 percent lower pre-tax profit of $6.04 billion (shareholder’s profit fell by 5 percent).

The Swiss wealth manager returned an eye-watering 80 percent of its profits to shareholders last year, and pledged to continue lifting the dividend. The at first glance good news masks a lack of ideas and impetus at UBS for how to use that money for growth. UBS’ pricey infrastructure needs volume growth to pay off – such as mergers and acquisitions in wealth management.

2. Investment Bank Degraded

If it wasn’t clear already, UBS rammed home the point that it is all about private banking – and thus over to Iqbal Khan, on whom rest the Swiss bank’s growth hopes. UBS’ investment banking as well as asset management strategy? Collaborate with GWM, the Khan- and Tom Naratil-led $2.5 trillion wealth arm. The investment bank in particular will lend to wealthy clients more (see separate point x), tailor homemade products for the super-rich, and manage risks for the wealth unit.

3. Loan Growth Which Earns Its Name

With $2.6 trillion in assets, UBS granted just $179 billion in loans last year to private clients. The bank vowed to push lending more forcefully two years ago, but that has hardly happened: volume edged just four percent higher in the last year. UBS is missing out on a potentially lucrative source of revenue – and Khan needs and wants to step on the gas here. The wealth unit plans to extend loan growth by as much as $30 billion annually. Khan set up an unified global markets arm to do so.

4. Spygate