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UBS defies volatility to record 4% GWM profit growth in 2022

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UBS Global Wealth Management (UBS GWM) attracted US$60 billion in net new fee-generating assets (NNFGA) globally for 2022 and US$23 billion in 4Q2022, including a strong performance in Asia-Pacific, as the Swiss private bank defied market volatility and weak investor sentiment.

On a regional basis, UBS GWM soaked up US$14 billion of NNGFA for the year in Asia Pacific, according to quarterly results announced on Tuesday. The bank also indicated that it would repurchase more than US$5 billion in shares this year.

Source: UBS

Profit before tax (PBT) for the group on a global basis for 2022 increased 1% to US$9.6 billion. Total revenues decreased 2%, with operating expenses down 4%. Net profit attributable to shareholders was up 2% to US$7.63 billion. The group delivered a return on CET1 capital of 17% and a cost-to-income ratio of 72.1%, in line with its targets.

The bank saw a 17% YoY increase in net interest income across GWM and Personal & Corporate Banking (P&C) in 2022. While many private clients remained on the sidelines during the year due to uncertain markets, institutional clients were very active, amid equity market volatility 1H2022 and strong FX and rates markets in 2H22.

Ralph Hamers, UBS

“We continue to execute our strategy to capture growth. In the US and in Asia-Pacific, we are strengthening our one bank approach for our core wealth and global family and institutional wealth clients,” Ralph Hamers, group CEO, said in the announcement.

He added that the firm remains committed to a progressive dividend and expect to repurchase more than US$ 5 billion of shares this year. The bank intends to propose an ordinary dividend of US$0.55 per share for 2022.

However, the bank is still cautious on capital flows in Asia in the coming months

In “the fourth quarter, also the first few weeks this year, we’ve seen investors surprised by the quick re-opening of China. While for actual inflow and activities, many of our wealthy clients are still in a ‘wait and see approach’,” Hamers said in a post-earnings investors calls.

“We see positive signals to the market at the beginning of this year, but we are still waiting for inflation numbers to get a sense of how central banks will have to curb that inflation and break it into a non-structural inflation with a lower level which is the cost of that could be to the economy,” he added.

GWM’s PBT dips 27% QoQ

GWM recorded US$1.058 billion in PBT for 4Q2022 and US$5 billion for full-year 2022, representing 88% and 4% growth, respectively. Sequentially, 4Q2022 PBT fell 27% from US$1.453 billion.

Transaction-based income decreased 19%, mainly driven by lower levels of client activity. Net credit loss expenses were US$3 million in 4Q2022 compared with net releases of US$2 million in 4Q21. The cost/income ratio for GWM was 76.9% in 4Q2022, down 11.4 percentage points YoY.

Hedge fund business drags AM performance

Source: UBS

For UBS’s asset management unit, total revenues were down 31% YoY in 4Q2022. Net management fees decreased 25% YoY, mostly reflecting negative market performance and FX movements.

Performance fees also decreased by US$70 million, mainly due to weakness in the hedge fund business.

Invested assets increased 9% sequentially to US$1.064 trillion while net new money was US$ 10.8 billion.


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