Once more, UBS Germany has been forced to post a loss. However, the German subsidiary gained ground in asset management – and managed to make important preparations for Europabank.
In its eleventh year in existence, UBS Germany, the so-called powerhouse, had to endure a loss. But according to the recently published 2015 annual report, the German subsidiary of the Swiss banking giant was only a hair’s breadth away from positive territory.
The bank suffered a loss of 5.6 million euro in 2015, after having to accept a record loss of 80.6 million in 2014. As usual, the loss will be balanced out by the Swiss parent company. The results «are in line with expectations», the German subsidiary said.
More Assets, Fewer Staff
Despite the less than stellar results, the new leadership team put in place in May 2015 (article in German) by Thomas Rodermann has stacked up other achievements. This is particularly visible in the core business of UBS, wealth management. Assets under management at the bank have risen to 32.1 billion euro. As reported by finews.ch, the German subsidiary broke the 30-billion-euro barrier (article in German) for the first time at the end of 2014.
With this growth, the bank leadership fulfilled their promise to make progress in attracting new clients. In addition, the «efficiency and cost optimization» drive announced last year was no empty threat. The headcount fell from around 800 at the end of 2014 to 709 in December 2015. Outgoings for salary and remuneration fell from 134.3 million euro to 118.6 million euro.
The Madoff Effect
However, earnings stagnated at 201.1 million euro, and the provisional results were only slightly higher than the previous year, the annual return shows.
On top of that, UBS Deutschland has still not been able to free itself from a troublesome old burden. Lawsuits related to the Madoff fraud are still making an impact on legal risk, significantly denting the bank’s 2014 results.
Ready for Europabank
Nevertheless, in 2015 the German subsidiary took time to make preparations for the future of Switzerland’s largest bank. On January 1 2016, UBS introduced a new regional concept in wealth management, which will, it said, extend more decision-making power to the regions. Under the new model, the existing subsidiaries were divided into four regions – North, West, Center and South.
Behind the scenes, the groundwork is being laid for the planned Europabank– a holding that would unite all the wealth management business of the Continent under one entity. The German financial city of Frankfurt is a leading candidate as a location for the holding, as finews.ch reported.
End of an Era
«UBS Europe Societas Europea (UBS Europe SE)» also makes an appearance in the annual report of UBS Germany, with the comment that «talks with the relevant regulatory authorities have been initiated».
In preparation for the planned new legal structure, all parts of UBS Germany were sold to UBS AG and taken over on January 1 2016.
With this move, on a purely formal legal basis, the powerhouse is already consigned to history.
