UBS boss Gruebel: We're not selling U.S. wealth management biz

UBS Wealth Management Americas continued to see profits in the second quarter of the year. Meanwhile, the Swiss bank's executives reiterated that the unit was not for sale. In fact, UBS will keep on investing in its wealth management business, despite a need by parent company UBS AG to cut costs, executives told analysts on the call announcing the earnings this morning. The universal bank needs to cut $1.5 billion to $2 billion in costs over the next two to three years. While UBS chief executive Oswald Gruebel said the Swiss bank will announce a cost-cutting plan in the next few months, the bank views its wealth management business as “the greatest opportunity for growth.” For the past few months, rumors have been circulating that UBS was eyeing a sale of its U.S. wealth management unit, which is run by Robert McCann, to Wells Fargo & Co. But Mr. Gruebel denied again that the division is for sale. “Our wealth management business in the Americas is not for sale,” he said on the earnings call. “I only say that because these rumors keep coming up lately.” Pretax profits for the wealth management division were $165 million, up 39% from the first quarter. The unit reported a loss of $61 million in the year-earlier period. The wealth management group saw $1.5 billion in revenue, up 4% from the first quarter, and up 12% from the year-earlier period. Overall invested assets were up slightly to $774 billion, up 2% from the first quarter, but up 23% from the second quarter 2011. Invested assets per financial adviser were up 1% for the quarter at $113 million, beating Bank of America Corp.'s and Wells Fargo & Co.'s wealth management units. In addition, revenue per adviser at UBS for the second quarter was up 13% to $884,000 — second only to Bank of America's advisers. While compensation for UBS financial advisers was down 7% globally for the quarter, it was up 2% for U.S. advisers due to revenue growth, according to the firm. The unit, which has 6,862 financial advisers, recruited an additional 51 in the last quarter. [More: UBS CEO Gruebel resigns following $2.3B trading scandal]