UBS's wealth management profits declined in the first quarter as the unit's surging revenue was offset by higher expenses partly related to broker compensation.
Zurich-based UBS reported $1.1 billion in profit on $6.14 billion in revenue for its global wealth management division in the first quarter. The profit figure was down 9% year over year even though revenues were up 28%.
UBS blamed the profit decline on rising costs. It reported $5 billion in operating expenses for the first quarter, up 42% year over year.
Those were driven by $402 million in costs related to UBS's purchase of its longtime rival Credit Suisse for
UBS CEO Sergio Ermotti could point to one unquestionably bright spot for the firm's wealth business. It now has more than $4 trillion in assets under management, he said on a call with analysts, putting it well on the way to its goal of having
"We continue to deliver on the (Credit Suisse) integration. Helping our clients manage, grow and protect their assets remains our top priority," Ermotti said.
READ MORE:
Advisor headcount
After Merrill joined Wells Fargo and Morgan Stanley this year in no longer reporting headcounts, UBS was left as the last traditional wirehouse to provide a public tally of its advisor workforce. UBS said it had 6,079 advisors in its Americas division at the end of the first quarter, most of them in the United States. That was down slightly from 6,117 in the previous quarter.
Globally, UBS had 10,338 advisors at the end of the first quarter. That was up from 10,027 at the end of 2023.
Assets
UBS reported $27.4 billion in net new assets for its global wealth management business in the first quarter. That was down from $39.8 billion a year ago.
Of the new assets in the first quarter, $17.3 billion were fee-generating. UBS reported having $1.7 trillion in total fee-generating assets under management at the end of the quarter.
Americas wealth unit
UBS reported a $252 million profit on $2.7 billion in revenue for its wealth management business in the Americas. That was down from $364 million in profit on $2.6 billion in revenue from the same period a year ago.
The overall bank
The lackluster results for wealth did not stop UBS from reporting $1.8 billion in total profits for all of its business units. The bank's overall earnings received a boost from the revaluation of assets and liabilities it took on as part of the Credit Suisse acquisition.
It also made $272 million in a unit dedicated to winding down Credit Suisse businesses from the sale of various assets to Apollo Global Management. UBS said the Credit Suisse integration yielded about $1 billion in cost savings in the first quarter and is expected to provide an additional $1.5 billion by the end of 2024.
Remarks
UBS Chief Financial Officer Todd Tuckner said UBS's $27.4 billion in net new assets puts the firm well on its way to reaching its goals.
"$27 billion in the quarter is a strong result," Tuckner said. "We're on track to deliver on our ambitions, which we said was $200 billion (in net new assets) over the course of two years."
Tuckner also responded to an analyst's question about whether UBS would continue reporting the number of former Credit Suisse relationship managers who have departed. In its third-quarter results, for instance, UBS reported a loss of
Tuckner said Tuesday the departure figure has become largely meaningless, "especially given the fact that the (relationship manager) workforce and Credit Suisse is down 40% from the end of 2022 levels, and we've been able to retain the lion's share of the assets.
"So we consider that to be sort of a story not terribly worth following," Tuckner said. "And, in the end, we stay focused on our plans and our commitments."
