The tide may be turning at UBS’s wealth management business in terms of client inflows. The Zurich-listed banking group said it recorded inflows in the three months to the end of September although revenues fell and the overall parent firm suffered a big quarterly profits fall.

UBS’s Wealth Management section logged inflows of SFr1.0 billion (around $1.03 billion), contrasting with outflows of SFr5.2 billion in the previous quarter, aided by inflows from the Asia Pacific region and ultra high net worth clients. In its Wealth Management Americas unit, it recorded net new money of SFr300 million, contrasting with SFr2.6 billion of outflows in the prior quarter.

While the figures may be too early to prove that the Swiss banking giant has definitely reversed an outflow trend, the figures will be welcome news at the firm, which has been one of the most high profile casualties of the credit crunch, and was also hit by a bruising legal tax row with US authorities last year.

Revenues came under pressure despite the higher inflows, hit by lower client activity and the adverse effects of currency movements, UBS said in its statement today. Wealth Management's revenues declined 7 per cent to SFr1.759 billion compared with SFr1.891 billion in the second quarter. Consequently, the gross margin on invested assets decreased 6 basis points to 89 basis points.

There was a slight rise in costs, with UBS’s recently launched marketing campaign adding slightly to costs. Expenses also increased slightly mainly due to higher general and administrative expenses, including a lease termination provision.

Wealth Management Americas' revenues declined by 10 per cent, mainly due to currency effects as well as lower income resulting from lower managed account fees. Operating expenses decreased 11 per cent to SFr1.384 billion.

In terms of profit, Wealth Management recorded a pre-tax profit of SFr492 million compared with SFr658 million in the second quarter; Wealth Management Americas logged a loss of SFr47 million, which is narrower than the loss of SFr67 million in the second quarter. The third quarter result included a provision of SFr78 million due to an unexpected result in an arbitration matter, while the second quarter included restructuring charges of SFr146 million.

The Wealth Management & Swiss Bank segment of the performance figures showed pre-tax profit for the third quarter at SFr938 million, a fall on the previous three months of 17 per cent.

For the entire Swiss banking and wealth management group, pre-tax profit fell by 69 per cent to SFr818 million.

The bank’s BIS Tier 1 capital ratio improved, to 16.7 per cent on 30 September 2010 compared with 16.4 per cent at the end of June.