UBS reported strong results in its wealth management business during 2005, bolstered by still strong asset gathering numbers. Nevertheless, ...

UBS reported strong results in its wealth management business during 2005, bolstered by still strong asset gathering numbers. Nevertheless, the last quarter of the year showed some slowdown in net new money flows – although this might be little more than a seasonal statistical blimp. UBS’s wealth management business in Switzerland and its international business excluding the US reported a pre-tax profit of SFr4.1 billion ($3.1 billion), up 20 per cent from the 2004 figure. Forth quarter pre-tax profit came in at SFr1.17 billion, down from the SFr1.16 million in the third quarter. The bank said in its results statement: “This reflected its (wealth management) growing number of clients as well as rising financial markets throughout 2005, driving the asset base, and therefore recurring income, higher.” Net new money came in for the entire wealth management business at SFr95.1 billion for 2005. For the bank as a whole, net new money for last year reached an all-time high of SFr148 billion, up 80 per cent from SFr82.2 billion in 2004 – however, this would suggest that much of the growth in new money is being generated by wealth management, rather than UBS’s institutional asset management business. On a quarter on quarter basis, net new money for the bank’s wealth management business fell 57.8 per cent in the fourth quarter to SFr19.7 billion. The bank’s US wealth management business saw a big improvement in pre-tax profit, which came in at SFr312 million in 2005, compared with SFr29 million in 2004. Nevertheless, the bank said that in US dollar terms and before acquisition costs, full-year 2005 pre-tax profit was down 4 per cent from 2004. The bank’s recent settlement with many of its financial advisors in the US was provisioned for in the third quarter and hurt the US results. Peter Wuffli, the bank’s chief executive, said early indicators suggest the bank will continue on a strong footing in 2006. "We are therefore optimistic about the outlook for UBS – for 2006 and beyond. We now have a strong competitive position in the areas we chose to invest in – among them European wealth management, alternative investments, investment banking, prime brokerage and in Asia Pacific across business lines.”