UBS highlighted sparkling growth at its wealth management businesses yesterday as Europe’s third-biggest bank said that it had attracted SwFr31 billion (£13 billion) in new money worldwide in three months.
The bank tempered the results, however, with a warning of more difficult times in the second half. Peter Wuffli, chief executive, said: “With respect to revenues, the second half will be softer in the investment bank, but also in wealth management.”
Record wealth management profits of SwFr1.2 billion — on the back of new money from the United States, Europe and Asia — contributed to second-quarter profits that were 47 per cent higher than last time at SwFr3.1 billion.
The strong result was also driven by a hefty contribution from investment banking, where profits hit SwFr1.7 billion, up 57 per cent from the second quarter of last year. The result contrasted with second-quarter earnings from rivals such as Deutsche Bank and Credit Suisse, where trading earnings have been cut by the volatility in stock markets.
Mr Wuffli also said that the bank would look for acquisitions and gave warning that it would not fulfil its one-year SwFr5 billion share buyback programme.
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The new money taken into wealth management was up 23 per cent on the first quarter and 50 per cent higher than the same period last year. The bank is trying to harness Asian companies’ increasing demand for investment banking services.
Profits at the investment bank were 57 per cent higher than last year at SwFr1.7 billion. The bank’s equities business produced revenues of SwFr2.3 billion, up nearly three quarters from same period in 2005. The revenues generated by the fixed income and currency markets were SwFr2.6 billion, up 50 per cent on the same period last year.
However, despite the strong figures, Jon Peace, an analyst at Fox Pitt Kelton, said: “The outlook might prompt investors to question whether they should own an investment bank at all for the short term.”