UBS profits shrank 52% over the past year and it lost 98 net advisors over the past quarter, the firm disclosed in its first-quarter earnings Tuesday — reflecting challenges the bank will face as it seeks to continue growing its wealth unit in a rocky market environment while
The Swiss wirehouse missed Wall Street analyst expectations with diluted earnings per share of $0.32, which was 41% below the analyst
Higher expenses and lowered revenues from "negative market performance and lower levels of client activity" contributed to its disappointing results, UBS said in its
The company also reported gains in client assets, reflecting "how clients turn to us as they search for stability," UBS CEO Sergio Ermotti said in an earnings call Tuesday with analysts.
"Net new money in GWM [Global Wealth Management] was $28 billion. Importantly, $7 billion of this came in the 10 business days after the acquisition announcement," Ermotti said, adding that although "our wealth management clients remain on the sidelines," advisors had succeeded in continuing to engage them.
"What is important is deposit shift into money market and T-bills remained with UBS, and we also saw $9 billion in new deposits into our platform."
The GWM unit added $19.7 billion of net new fee-generating assets, and the Americas arm of GWM added $3.8 billion of that.
"US wealth inflows showed a slowing pace of net new fee generating assets in 1Q — $3.8 billion vs 4.2 billion in 4Q," Alison Williams, an analyst at Bloomberg Intelligence, said in an email Tuesday.
"Overall the net interest income outlook for the global wealth unit is more negative as we see deposit outflows and money market inflows — similar to what we saw at Morgan Stanley," Williams said.
To see the main takeaways from UBS's first-quarter earnings, scroll down the slideshow. For coverage of the firm's fourth-quarter earnings,