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UBS Asia Pac pulls in bumper assets growth to 373b Swiss francs in 2017
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 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.
"I'm very proud of the team. More importantly more than 90 per cent of clients had a positive experience in their portfolios which had strong gains. I make attempts to see as many clients as possible and they're very happy - exceptionally so in the last year.''
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 were 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.
Loans comprise about 11 per cent of invested assets. The bank's Mandates platform, which refers to its discretionary portfolio management services, also clocked in a record year. Assets under management under Mandates rose 40 per cent.
Meanwhile, the bank expects to continue with three initiatives startedlast year. One is the integration of the ONE Wealth Management platform, a US$1 billion effort to standardise the group's IT system. It has been rolled out in Singapore and Hong Kong. "This is important for us as a common platform makes us more adaptable. It's in the initial stage, but it will become stronger.''
A second initiative is UBS Unique, a programme targeted at female clients. UBS Unique aims to raise the financial confidence of one million women by 2021.
"Women are an emerging force in Asia. Women entrepreneurs and successors (of wealth) are younger, dynamic and very demanding for knowledge but they have different considerations for investments. They are more into impact investing and philanthropy. The demand for consideration of succession is very strong…''
The third is China expansion. China domestic wealth management is delivered through UBS Securities and UBS (China). The latter is seen as a critical prerequisite for a broad range of RMB business.
More recently UBS Wealth Management announced a joint venture with Qianhai Financial Holdings, which is expected to be the vehicle for an online fund distribution business.