October 30, 2012

UBS Reports Q3 Loss; Improves Advisor Headcount

Profits are up for U.S.-based wealth operations as the number of advisors tops 7,030

Early Tuesday, UBS (UBS) reported a third-quarter loss of nearly 2.2 billion Swiss francs, or -0.58 Swiss francs per share versus a gain of 3.8 billion Swiss francs, or 0.27 Swiss francs per share a year ago, and a gain of 425 million Swiss francs, or 0.11 Swiss francs per share, in the second quarter.  

This news came on the heels of plans to radically restructure the global bank by shedding it of nearly 10,000 employees by 2015 and ridding it of certain businesses, most notably fixed income. UBS now has about 63,745 staff members and wants to trim down to 54,000.

The wealth-management operations in the Americas, though, had strong results. The unit recorded a pre-tax profit of $230 million, up 35% from a year ago and 9% from the previous quarter.

"The strong progress we have made over the last 12 months allows us to begin implementing this next phase of our strategy” Group CEO Sergio P. Ermotti (left) said in a press release.

“We are ahead of schedule in our plans to build additional capital strength and reduce both costs and risk-weighted assets,” added Ermotti, who has led the company for the past year. “The opportunity we have today to accelerate the transformation of our firm is one that I believe is unique – and one that will allow us to continue to unlock the full potential of our franchise."

Other WMA Results

UBS’ Wealth Management Americas, led by Bob McCann, also reported that net new money was $4.8 billion, up from $3.8 billion in the previous quarter but down slightly from $5 billion a year ago. Including interest and dividend income (a measure used by some UBS rivals), net new money was $9.8 billion versus $9.0 billion in the second quarter and $9.7 billion a year ago.

The group, which employs a total of 16,182 individuals, now has 7,032 financial advisors. That figure is up 11 from 7,021 in the second quarter, and an improvement of 119 from 6,913 a year ago.

Total operating income was $1.6 billion, an increase of $44 million from the previous quarter “mostly due to higher transaction-based revenue,” the company announced in its earnings release.

Net fee and commission income increased by $36 million in the second quarter to $1.2-plus billion, as transaction-based revenue increased 12% thanks to higher commission income from equities products.

Total client assets for the unit were 823 billion Swiss francs, nearly $883 billion, versus 795 billion Swiss francs in the prior quarter and 686 billion Swiss francs a year before.

For more Q3 2012 earnings news, see AdvisorOne’s 2012 Q3 Earnings Calendar for the Finance Sector.

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