UBS rounded off a strong year of profit and asset under management growth across its wealth management regions in 2013, Switzerland's largest bank said today.

UBS rounded off a strong year of profit and asset under management growth across its regions in 2013, albeit with some mixed results in the final three months, the Zurich-listed bank said in full-year figures today. Its wealth management businesses increased combined full-year adjusted profit before tax by 25 per cent to SFr3.3 billion (around $3.7 billion); net new money of SFr53.5 billion, up SFr6.6 billion.

Group invested assets across UBS stood at SFr2.390 trillion at the end of the fourth quarter, a rise of SFr51 billion on the prior quarter. Invested assets in wealth management (not including Americas) increased by SFr15 billion to SFr886 billion as of 31 December 2013, supported by positive market performance of SFr12 billion and net new money inflows of SFr6 billion, partly offset by negative currency translation effects of SFr2 billion. Invested assets in the wealth management Americas division increased by SFr34 billion to SFr865 billion as of 31 December 2013, it said. In US dollar terms, invested assets increased by $51 billion to $970 billion.

In its wealth management arm (not including Americas), profit before tax was SFr471 million in the fourth quarter of 2013, a drop of SFr84 million compared with SFr555 million in the third quarter. Adjusted for restructuring charges, profit before tax fell to SFr512 million from SFr617 million.

Operating income increased by SFr22 million to SFr1.859 billion, mainly reflecting higher net fee and commission income. Operating expenses increased by SFr107 million to SFr1.389 billion as lower charges for provisions for litigation, regulatory and similar matters were more than offset by seasonally higher other general and administrative expenses and higher variable compensation expenses.

The gross margin on invested assets was stable at 85 basis points. Net new money was SFr5.8 billion compared with SFr5.0 billion in the prior quarter, the Zurich-listed bank said in a statement today.

For the whole of 2013, wealth management logged an adjusted profit before tax of up 17 per cent to SFr2.4 billion; net new money rose SFr9.6 billion to SFr35.9 billion due to strong inflows, particularly from Asia Pacific and ultra high net worth clients globally, resulting in net new money growth within target at 4.4 per cent

Americas
In its Wealth Management Americas arm, UBS logged a record quarterly profit before tax of $254 million in the fourth quarter of 2013 compared with a profit of $218 million in the third quarter. Adjusted for restructuring charges, profit before tax increased to $283 million from $232 million, it said.

The reported result reflected a 6 per cent increase in operating income due to higher recurring income and higher transaction-based revenue. This was partly offset by a 4 per cent increase in operating expenses, mainly due to higher financial advisor compensation and restructuring charges.

Net new money inflows increased to $4.9 billion from $2.1 billion in the prior quarter, mainly due to higher inflows from financial advisors employed with UBS for more than one year, the statement continued.

For 2013 as a whole, Wealth Management Americas achieved record adjusted pre-tax profit of $991 million, reaching its target of an annual profit of $1 billion, and strong net new money of $19.0 billion; net new money growth, gross margin and adjusted cost/income ratio all within target, it said. 

Back in profit

Looking across all divisions, such as asset management, wealth and investment banking, Switzerland’s biggest bank said all divisions posted “strong results for the year, demonstrating that its model has the flexibility to adapt and perform well in a variety of market conditions”. In contrast to a loss for 2012, it swung back into the black in 2013.

UBS logged an increased adjusted full-year profit before tax of SFr4.1 billion, up 44 per cent compared with the prior year. On a reported basis, profit before tax was SFr3.3 billion. The result included charges for provisions of SFr1.7 billion for litigation, regulatory and similar matters, and a net tax benefit for the year of SFr110 million. Net income attributable to shareholders in 2013 was SFr917; in 2012, UBS made a loss, attributable to shareholders, of SFr2.48 billion.

Last year, UBS reduced its risk-weighted assets to bolster its overall capital strength; this included a 38 per cent cut of its non-core and legacy portfolio fully applied RWA.

The entire group had a cost/income ratio of 92.7 per cent.