Asia has traditionally been a bright spot for UBS’ wealth management arm. The Swiss lender was hit with quarterly outflows but is holding fast to its growth strategy in the region.
Zurich-based UBS' invested assets in Asia fell by $37 billion to $546 billion in the three months to September 30. The Swiss giant suffered client withdrawals of $1.8 billion in the region, compared to inflows of $3.8 billion in the last quarter.
«On the back of some of the uncertainty towards the end of the quarter which we already saw that coming, we asked some clients to deleveraging and with deleveraging comes the sale of assets,» CEO Ralph Hamers said in a webcast on the quarter’s financial results.
Optimism For Rebound
The 55-year-old Dutch banker, rounding his first year running the Swiss bank, indicated he would hold fast to Asia and in particular China as part of UBS' strategy despite geopolitical woes. He voiced confidence that business in the region will rebound.
«The way we look at Asia is much more strategic,» Hamers said, suggesting that the asset drop is a short-term blip. «We’ve been there for the last 60 years. We know the wealth pool is large and will grow faster than anywhere else. That’s why we are committed to the region [and] that’s why we think we will bring the numbers back up.»
Decrease In Loans
For the quarter, UBS’ wealth management unit in Asia saw loans decrease 4 percent to $51 billion, driven by net new loan outflows of $2.2 billion, mostly in Lombard loans.
Nonetheless, the bank registered pre-tax profit growth in Asia of $293 million – a 3 percent and 14 percent increase compared to last quarter and the same period last year – on lower revenue ($703 million) but even lower costs ($410 million).
