UBS predicts rebound as profits rise

City A.M. Reporter
UBS EXPECTS to win more client money for its wealth management business in 2011 and sees a rebound in the investment banking division, it said yesterday as it unveiled fourth quarter results.

Switzerland’s biggest bank said it had seen improvement across private banking in the fourth quarter -- with total net new money of SwFr7.1bn (£4.6bn). The bank won client cash in the Asia Pacific and Americas regions and among Swiss customers, but bled a small amount of assets both onshore and offshore in Europe, where countries have chased tax evaders.

Fourth quarter profit was SwFr1.3bn, missing consensus expectations of SwFr1.54bn, although this was largely due to a series of one-offs, including a charge relating to its own credit.

Wealth management revenues rose two per cent in the fourth quarter, though the unprecedented strength of the Swiss franc partly offset increased client activity.

The Americas business attracted SwFr3.4bn francs of new money, demonstrating it was rebuilding client trust after a tax dispute that forced UBS to hand account data to US authorities.

UBS said its Tier 1 capital ratio rose to 17.7 per cent from 16.7 per cent the previous quarter, and it reiterated that it did not plan to pay a dividend for 2010 or for some time to come. The bank also cut its bonus pool by 10 per cent to SwFr4.3bn.