Ermotti, who oversaw UBS’s shift away from investment banking following the global financial crisis to focus on managing money for the rich, last year pledged to drive up wealth-management profit. But the firm for now remains vulnerable to market volatility, with clients withdrawing almost $8 billion at a key global wealth unit in the fourth quarter, and another $5 billion from asset management.
That’s likely to have made crosstown rival Credit Suisse a little nervous.
Under Chief Executive Officer Tidjane Thiam, the smaller firm has shifted its focus in recent years from more volatile trading in favor of wealth management, slashing thousands of jobs and tapping shareholders for billions of francs of funding during the restructuring. The firm is planning to sell more equity derivatives to wealth-management clients and has hired more than 50 additional staff in that area, according to an investor presentation Dec. 12.
Thiam on Tuesday said in an interview from Davos that assets at his firm have been “resilient.” Private banking has been a bright spot of his turnaround, with new money and higher profitability helping offset weaker returns at its main trading unit. The bank continues to attract inflows at a healthy clip in wealth management, adding about 100 billion francs since the beginning of the restructuring, it told investors in December. It now manages about 785 billion francs, profiting as global wealth nearly doubled in the past decade
Still, investors will be watching closely when his firm reports fourth-quarter earnings next month.
“Look, it is a very difficult fourth quarter,” Thiam said Tuesday. ”Things have gotten better since the beginning of the year.”
This article was provided by Bloomberg News.