The Asia Pacific wealth arm of UBS registered lower profits, revenue and loan assets in the fourth quarter, as dented appetite hit the region’s largest private bank.
UBS Global Wealth Management in APAC posted a pre-tax profit of $178 million in the fourth quarter, according to its latest financial results, down 8 percent compared to $193 million in the same period in 2021.
Revenues fell 3 percent to $586 million, mainly due to lower recurring net fees and transaction-based income while the cost-income ratio climbed from 68.2 percent to 69.7 percent.
Loans fell 7 percent compared to the third quarter to $34.5 billion due to a $3.5 billion net outflow driven by client de-leveraging from market uncertainty. Year-on-year, gross loans decreased by $14.1 billion.
Invested Assets Shrink
While invested assets reached $437 billion in the fourth quarter – up $25 billion compared to the third quarter’s $412 billion – this still marked a 16 percent drop year-on-year or an annual decrease of $84 billion.
The Swiss private bank attracted $3.4 billion of net new fee-generating assets, up from $2.8 billion in the fourth quarter of 2022.
For the full year of 2022, the APAC wealth arm registered $943 million in pre-tax profit, down 24 percent compared to 2021’s $1.3 billion.
Short-Term Outlook
While UBS notes that the outlook for economic growth, asset valuations and market volatility «remains highly uncertain» alongside risks from central bank tightening and the Russia-Ukraine war, it is positive on performance in the first quarter of 2023.
«Although the macroeconomic and geopolitical situation remains uncertain, we expect our revenues in the first quarter of 2023 to be positively influenced by seasonal factors, such as higher client activity levels compared with the fourth quarter of 2022,» the bank said.
«The easing of COVID-19-related restrictions in Asia Pacific is expected to contribute to generally more positive sentiment in that region, which we expect to translate into higher client activity levels over time.»
