UBS Group (UBS) reported a fourth-quarter 2014 net profit on Tuesday of 963 million Swiss francs ($998.3 million), a jump from 5% last year. Its overall revenue grew about 7% to 6.75 billion Swiss francs ($7 billion).
Fourth-quarter results in the group’s wealth management operations in the Americas included operating income of $1.924 billion in Q4’14, up slightly from $1.919 billion in Q3’14 and an increase of 4% from $1.852 billion in Q4’13.
The company pointed to a drop in fee-based income.
“Recurring net fee income decreased by $10 million to $1,187 million, mainly due to lower mutual fund fees partially offset by higher managed-account fees,” it explained in its earnings report. Transaction-based income, though, improved by $7 million to hit $448 million in the fourth quarter, thanks to “slightly higher” client activity.
Wealth Management Americas’ adjusted operating profit before taxes was $217 million, a drop of 15% from the same year-ago period and from the prior quarter.
The Swiss-based firm says the profit drop stemmed from a nearly $30 million jump in personnel expenses, which totaled about $1.4 million in the fourth quarter.
“The increase was mainly due to higher financial advisor compensation … and higher variable compensation expenses,” it said in its earnings report. “Expenses for compensation commitments related to recruited financial advisors increased by $4 million to $187 million.”
UBS’ advisor headcount in the Americas was 6,997 as of Dec. 31, down 1.5% from 7,114 in the third quarter and a decrease of 2% from 7,137 a year ago.