UBS Piles On Private Client Business

by Ulrika Lomas, Tax-News.com, Brussels

17 August 2001

Although UBS reported overall profits 30% lower at SFr 1.8bn for the second quarter, it has seen a good performance from its private client business, with an increase of SFr 28.2bn in new business during the first six months of the year. There was a SFr 6bn increase in funds under management at PaineWebber, which UBS acquired last year. This confirms a recent trend for investors to desert smaller Swiss banks in favour of the bigger names: Zurich-based Julius Baer Group reported a 45 percent plunge in net profits last week, with net new money slowing by 50% to SFr 2.4bn and a 1% decline in funds under management. Rumours abound that several of the family-owned Swiss private banks are up for sale.

As expected, profits at UBS Warburg, UBS's investment bank, fell 20 per cent in the second quarter despite record revenues from foreign exchange and bond trading. The bank posted profits of SFr 1.14 billion for the three months to June 30. Revenue in foreign exchange and fixed income reached record levels of SFr 1.9 billion, an increase of 50 per cent. Corporate finance, including mergers and acquisitions, defied the industry trend with a 9 per cent rise in revenue, after the investment bank topped league tables covering European deals.

Luqman Arnold, UBS’s chief executive, said: “Although these are tough markets, our core businesses remain in good health.” UBS shares rallied despite the fall in profits.

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