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UBS Improves Earnings, but Wealth Groups Falter

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UBS said Tuesday that it had a fourth-quarter profit of about $958.3 million, up nearly 11% from a year ago thanks to higher net trading income. The latest results included a tax benefit of $722 million, net charges for regulatory and other issues of $368.6 million and a charge of $259.5 million for a debt buyback.

The company’s adjusted operating income increased 3% from last year to $7 billion, while its adjusted pretax operating profit was $761.4 million, an improvement of close to 50% from last year.

Wealth management operations outside of the Americas, however, experienced a decline in profits of about 27% to $509.9 million, though the asset management unit’s adjusted operating profit rose 23% to $154.5 million.

Americas’ Results

The Wealth Management Americas unit, which includes more than 7,000 advisors, reported that its pretax profits sunk 94% to $13 million, mainly due to $180 million in net charges for litigation, regulatory and related matters. Adjusted profits dropped to $63 million from $287 million.

Net new money inflows for the period approached $17 billion on strong recruiting, though sales or operating income fell by $57 million, or 3%, to $1.87 billion in the quarter on lower managed account fees.

Profits excluding special charges were close to $300 million, the company says.

“We continue to drive results and focus on becoming the firm of choice for high-net-worth and ultra-high-net-worth clients and the advisors who serve them,” it explained in a statement.

Invested assets for the unit were $1.033 trillion, up 4% from $992 billion in the prior quarter and generally flat from $1.032 trillion a year earlier.

The level of invested assets per advisor stands at $145 million, up 2% from $142 million in the prior quarter but down 1% from the year-ago period.

Average fees and commissions per rep weakened about 5% from Q3 and 3% from a year ago to $1.06 million. “WMA continues to have the most productive advisors in the Americas wealth management industry,” UBS explained.

The group includes 7,140 FAs, a jump of 151 from Q3’15 and up from 6,997 in Q4’14.

— Check out UBS Boosts Bonuses for Top Teams in 2016 on ThinkAdvisor.


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