UBS Turns Profits Around, Beats Estimates

UBS says its advisors in the Americas have yearly fees and commissions of $1 million on average

CEO Sergio Ermotti of UBS. (Photo: AP) CEO Sergio Ermotti of UBS. (Photo: AP)

UBS said early Tuesday that its fourth-quarter profit rose to 917 million Swiss francs ($1.02 billion), beating analysts’ estimates with a strong turnaround from a loss of 1.9 billion francs a year ago, when it was fined for trying to rig global interest rates. It benefitted from a tax gain of 470 million Swiss francs.

As a result, UBS said it may boost its 2013 dividend to 25 centimes a share from 15 centimes, about 30% of the bank’s full-year net income of 3.17 billion francs. UBS also expanded its 2013 bonus pool, which included deferred pay, by 28% to 3.2 billion Swiss francs.

News for UBS’ wealth management operations in the Americas (WMA) was also upbeat. The group’s sales were $1.85 billion, up 5% from the earlier quarter and 9% from a year ago.

“In 2013, WMA delivered on our goals of $1 billion in adjusted pretax profit and $1 million in annualized revenue per financial advisor while invested assets rose to $970 billion—all record levels of performance,” said UBS Group CEO Sergio P. Ermotti, in a statement. “Coupled with our 14th consecutive quarter of positive net new money, WMA's results are further proof that our strategy is working.”

UBS says that its advisors had an average assets of $136 million and average production of roughly $1.04 million, up 5% from $994,000 in 3Q’13 and up 8% from $967,000 in 4Q’12. The full-year 2013 average production level was $1.001 million.

The group’s advisor headcount stood at 7,137, the same as in 3Q’13 and up 1% from 7,059 in 4Q12.

In comparison, Morgan Stanley (MS) says it has 16,456 advisors with average client assets of $116 million, and average annualized revenues per advisor of $905,000.

Bank of America's (BAC) traditional Merrill advisor force stands at 13,771, and these reps had yearly production of $1.005 million in 2013. They produced average fees and commissions of $1.039 million in Q4’13 vs. $1 million in Q3’13.

The UBS unit attracted $4.9 billion in net new money in the quarter (excluding interest and dividends), up from $2.1 billion in Q3 but down from $8.8 billion in Q4’12. Including interest and dividends, NNM was $14.3 billion vs. $7.5 billion last quarter and $16.7 billion a year ago.

“We're pleased with the progress this business has made in recent years," said UBS Group CFO Tom Naratil in a statement, "and with invested assets of $1 trillion, pretax profits of a billion and FA productivity around $1 million, we're also excited about its future.”

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