UBS wealth management announces record profits, new money

UBS AG reported improved results for its U.S. retail-wealth-management business, with a record pretax profit of $251 million during the first quarter, as well as a record $9.2 billion in net new money. In an earnings report released today, UBS said results in its U.S. retail unit were driven by the addition of new brokers, continued low attrition and better collaboration efforts with its global family office business. Overall, UBS AG posted a pretax operating profit of $1.56 billion in the first quarter, up from a loss of $1.98 billion in the prior quarter, when the Swiss bank took a $1.5 billion charge in settling a London Interbank Offered Rate manipulation case with regulators. Its U.S. retail business, Wealth Management Americas, saw revenue hold steady at $1.74 billion for the first quarter, compared with the prior quarter, and up 11% from $1.57 billion a year ago. The financial adviser head count was 7,065 as of the end of March, up from 7,015 a year ago. The U.S. business also achieved record client assets of $891 billion, up 6% from $843 billion in the fourth quarter of 2012 and up 10% from $807 billion in last year's first quarter. Assets per U.S. financial adviser also hit a record, reaching $126 million in the first quarter. In its earnings release, UBS said that investors globally showed a “renewed interest early in the first quarter” but that unresolved issues with the European debt situation and fiscal issues in the U.S. “would continue to exert a strong influence on client confidence [and] activity.” For more than a year, the company has been engaged in restructuring designed to cut risk levels and focus on wealth and asset management, while paring back on capital-intensive investment banking activities. UBS last fall said that it planned to accelerate its revamp, cutting another $3.7 billion in costs on top of previously planned savings of $2.2 billion over the next three years. The bank is also cutting 10,000 employees over that period, from the 64,000 it had last fall.