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UBS Asia-Pac pulls in record 2017 growth in assets
UBS Wealth Management Asia-Pacific clocked in a record year of growth in assets under management last year, buoyed by a robust showing among stock markets and a surge in net new monies.
The feat was achieved at a time when the number of advisers stayed roughly flat.
The Asia-Pacific unit's invested assets rose 28 per cent to 373 billion Swiss francs (S$522 billion) for the full-year 2017, the strongest year since 2010, compared to 292 billion Swiss francs in 2016. Net new money surged by 37 per cent to 28.4 billion Swiss francs. Over the last two years, the Asia-Pacific unit's invested assets has grown at an annual compounded rate of 20 per cent. The number of client advisers has been consistent - 1,016 in 2016 and about 1,037 last year.
Edmund Koh, UBS Wealth Management Asia-Pacific head, said: "We're fortunate in Asia to be in area of growth. There is a lot of competition. I'm glad that despite competition, we surged ahead in the right way. More of new money is from existing clients than new clients."
The Asia-Pacific unit made a strong 21 per cent contribution to the bank's global wealth management division. Last year was the first year where UBS Americas' numbers are consolidated into the global business. If the Americas business was excluded, the Asia-Pacific's profit contribution would have been about a third.
This year business outlook is rosy, said Mr Koh. The market outlook, for one, remains positive with a risk-on bias. This underpins asset growth. The overall pace of wealth creation is also expected to remain brisk, even as interest rates are expected to creep up. UBS expects three rate hikes by the US Federal Reserve this year, which may influence Singapore Sibor rates.
"We think three-month Sibor would be near 2 per cent a year from now. But corporate earnings will be sustainable and economic growth as well. We think Asia equities will return 15 per cent and corporate earnings 10 to 12 per cent. So overall, these bode well for markets ... Asia should still push its weight even with a slightly slower growth in China at 6.4 per cent. Those are good numbers. India should continue to grow and countries in South-east Asia.
"We also see from entrepreneur clients more confidence in building up capex. From equities to fixed income, all the way to commodities, prices are showing resilience and pointing towards growth."
Mr Koh estimates that around 65 per cent of net new monies came from existing clients, and the balance from new clients. The influx of new clients' monies should help to propel further asset growth this year, particularly on the back of leverage which has stayed relatively modest. "About US$29 billion in net new money bodes well for this year as it will be leveraged up."
Loans comprise about 11 per cent of invested assets. "We're proud of our growth organically, and it doesn't mean we rule out inorganic opportunities," added Mr Koh.