(Bloomberg) — UBS’ Sergio Ermotti said he expects to add about $50 billion in business across wealth management and asset management this year as low interest rates limit how much new business the bank takes on.
Growth will be “in line with what we did in the last few years,” he said at the World Economic Forum in Davos. “In those numbers there’s a lot of noise from clients changing their risk profile, their booking centers and so on.”
-
President Tom Naratil says the firm will recruit less, spend more on advisers already at the firm and give additional power to branch managers.
June 8 -
Analysts and industry insiders are divided as to what impact the wirehouse's revamped plan may have on rival firms and breakaway advisers.
June 9 -
Adviser recruiting was not expected to be affected, according to people with knowledge of the matter.
July 11
Ermotti said the bank is selective in what new money it accepts, as low and negative interest rates have eroded the banks’ profitability. Clients have also been less willing to use borrowed money to leverage their investments, he said, weighing on inflows.
With interest rates in the U.S. rising, bank executives at Davos have expressed some optimism about 2017. Tidjane Thiam, head of Credit Suisse, said yesterday that higher rates should benefit banks, and UBS Chairman Axel Weber said he was “quite optimistic” about 2017.
‘U.S. MOMENTUM’
There “is clearly a U.S. momentum,” Ermotti said. “The U.S. is a promising market for us.”
UBS’s wealth management unit reported adjusted net new money inflows of 22.8 billion francs ($22.8 billion) in 2015, and wealth management Americas added $21.3 billion. The Asset Management unit suffered outflows.
UBS retreated from large parts of investment banking in late 2012, seeking a more stable, less risky source of income. Investors have piled into UBS since its revamp, enticed by its policy of returning at least half its profit to shareholders. While Ermotti has reaffirmed the practice, the bank is also building capital to comply with new Swiss rules and support growth.
