UBS Asia-Pacific posts record growth in assets and pre-tax profit
Singapore
DESPITE the pandemic, UBS' AsiaPacific (Apac) business has streaked ahead to achieve a record growth in assets under management (AUM) and pre-tax profits.
AUM in the wealth management segment rose by US$110 billion over 12 months to US$560 billion as at end-December, compared to US$450 billion at end-2019.
Pre-tax profits generated by wealth management, investment banking and asset management doubled to US$2 billion for the first time, accounting for about a quarter of group pre-tax profits.
In the wealth management segment alone, profits grew from US$560 million to US$1.1 billion.
Edmund Koh, UBS Apac president, said the growth has been "phenomenal". Private clients, he said, were in a "very good position", not just in terms of their credit positions, but also in performance. This is partly thanks to a rapid transition by the bank and clients into a digital mode, which the bank describes as "high tech to high touch".
"In February and March our CIO (chief investment office) view was that it was a good time to get into the market. It was a good opportunity for those able to go long. A lot of clients were very happy with the performance; they went through the year on all three asset classes - commodities, fixed income and currencies."
One of the bright spots was mandates, particularly those with a sustainability cast. The bank's 100 per cent sustainable investing mandate has crossed US$2.5 billion in assets. The second half of the year saw an inflow of US$1 billion.
UBS also launched the UBS Advice Premium (Sustainable Investing) service in the third quarter, a personalised advisory offering. By end-December, assets under advisory in the service had crossed US$300 million.
Mr Koh said the outlook for this year is bright, thanks to a strong economic rebound expected for the region, coming off a low base in 2020. The bank has forecast an average 7 per cent growth for Apac, and about 7 per cent for China. The forecast for global growth is around 5.3 per cent, eurozone 5.2 per cent and the United States at 3.3 per cent.
He said the outlook for asset markets remains positive, given the extent of monetary and fiscal stimulus in the market. US Treasury Secretary Janet Yellen has made a case for a "big push" US$1.9 trillion relief plan. "In that context when we look at equities and bonds or credit markets, we're still bullish although we think the (US) dollar will weaken because of the fiscal policy," Mr Koh added.
Tension between the US and China, however, is likely to persist "although in a way that is less acrimonious and volatile". "I think you will find more acceptance and stability in this trade tension, so that it's more predictable which is what people want," Mr Koh said.
As a group, UBS' invested assets across asset and wealth management reached record levels, currently at US$4.1 trillion. Group revenues were up 12 per cent, while pre-tax profit rose 47 per cent to US$8.2 billion.
UBS chief executive Ralph Hamers said: "It was a challenging year for our clients, for our colleagues, and for our communities alike, which makes these results even more gratifying.
"We stood for stability, maintained connectivity, and provided the advice and solutions our clients needed. And, in turn, they entrusted us with their business - with over a hundred billion dollars in net new money... We met or exceeded every single one of our growth and returns targets."
UBS said revenues in the first quarter of 2021 are expected to be positively influenced by seasonal factors such as higher client activity compared to the fourth quarter of 2020. Higher asset prices are expected to have a positive effect on recurring fee income.
