Tag: Banking

UBS launches a new tool providing ultra-high-net-worth clients in the US with a consolidated real-time overview of their entire portfolio.

A new wealth analysis and reporting platform in collaboration with IT companies Addepar and Mirador is the latest fintech offering from UBS. The new tool provides a streamlined, real-time summary of clients’ entire portfolios of various asset classes, Switzerland’s largest bank said in a statement.

The tool also gives UBS financial advisors access to analytics enabling them to efficiently monitor their clients’ investment results, cash flows, and value. An added benefit is they will also be able to examine the outlook and risks in their client’s portfolios.

In announcing the new offering John Mathews, head of private wealth management at UBS, said we recognize that our advisors need an intuitive, visual, and modern offering that will provide a complete picture of their clients’ full portfolio – from stocks and bonds to alternative investments and their private art collections.

As part of Addepar’s partner ecosystem, Mirador’s financial data technology experts will support UBS’s advisors with data management, custom visualization, and tailored reporting, as well as operations and system maintenance.

In October, UBS launched a new digital wealth management service platform to tap into the Chinese wealth management sector. The mobile app, WE.UBS offers financial planning built on Big Data and views from the bank’s chief investment office.

In the US, however, the big bank backed out of buying digital wealth manager Wealthfront last September. Following the collapse of the deal, UBS said it would pursue an organic approach to bringing the next generation of wealth management clients into the UBS fold.

We are back to our organic plans,» UBS Group chief financial officer (CFO) Sarah M Youngwood told an audience at the Barclays Global Financial Services Conference, according to a report on the advisorhub portal.

UBS names Damian Vogel to its executive board and becomes chief risk officer, replacing the current CRO who is stepping down to focus on academia and photography.

Damian Vogel succeeds Christian Bluhm as chief risk officer at UBS and will join the executive board effective the beginning of May, according to a statement from UBS Tuesday. The two will work closely together to ensure a smooth transition, UBS went on to say.

Vogel currently serves as chief risk officer for the global wealth management (GWM) business and joined UBS in 2010, having services in several risk-related leadership roles in GWM, personal and corporate banking, and the Swiss business.

Generally, when such announcements of executive changes are made, there tends to be a comment about «spending more time with family» or something equally banal. In the case of Bluhm, he is stepping down to focus (no pun intended) on his photography business. In addition, he is looking into opportunities in academia.

Bluhm was the Group’s CFO since 2016 and pushed the department to embrace advanced analytics, digitalization, and AI.

The re-making of the twelve-member group executive board under CEO Ralph Hamers continues to progress. Sarah Youngwood was appointed chief financial officer in May and Barbara Levi chief legal officer last November.

Appointed under Hamers’ predecessor Sergio Ermotti are investment bank chief Robert Karofsky, asset management head Suni Harford, GWM chief Iqbal Khan, compliance officer Markus Ronner and Asia Pacific head, Edmund Koh.

UBS is launching one online service after another in Switzerland, with a system discreetly analyzing customer behavior in the background. Now, its digital efforts are themselves under scrutiny.

New digital offerings every quarter is what Sabine Magri, chief operating officer (COO) of UBS’s Swiss business, promised in May when UBS launched its purely digital product line Key4. Since then, it has been rolling out new offerings in its home country. After pension and corporate client product launches, an investment solution went live this month.

With UBS expanding its digital offerings to clients, their behavior is registered on the new channels as inputs for a system working behind the scenes. This approach analyzes customer behavior and turns it into recommendations. Advisors receive tailored suggestions as to which products they can offer their customers.

Next Best Action» has been operating in UBS Switzerland’s wealth management business for about a year and is now being used in the retail business with private clients. In many cases, the tool is based on classic data analyses following simple rules not requiring a complex model. Nevertheless, it makes use of machine learning. The longer the system runs and the more data it can tap and make tailored recommendations.

These opportunities are then brought to client advisors through the bank’s internal interface. For now, this is a thought exercise, which the bankers can use if they think it appropriate. Notably, recommendations do not appear on the customer’s smartphone app but take a detour via the advisors.

In an environment where bank customers are generally reluctant to make transactions, the machine’s suggestions could soon gain influence. This means walking a tightrope not only for UBS but also for all other Swiss banks that specifically evaluate customer engagement.

This is not only because the huge amounts of data have only just begun to be made usable for business. Unlike search engines and social media platforms, which use highly sophisticated algorithms to spy on user behavior and send out targeted advertising, banks are subject to special rules, both from a regulatory perspective and because of the special relationship of trust.

Former UBS Chairman Axel Weber, warned in 2017 that customers should not feel like they are being spied on. Otherwise, there would be a rapid loss of trust.

His successor Colm Kelleher is now having his say on the digital strategy. It was rumored he was the one who pushed for pulling the plug on the acquisition of American robo-advisor Wealthfront in September. Through Wealthfront, UBS CEO Ralph Hamers wanted to reach the mass of wealthy customers in the United States.

That makes Switzerland all the more important as a test bench for the group’s digital transformation. Over the past nine months, UBS spent over 1.7 billion francs on operations, the lion’s share going toward upgrading technology. The bank cut back staff and real estate after closing 44 branches over the last year, another measure of the success of the digital transformation.

It seems to be working. Over 74 percent of UBS clients in Switzerland were active on the bank’s digital channels at the end of September, with nearly 58 percent using smartphones. It is no coincidence the bank highlights these figures every quarter. The bank’s progress with digitalization plays a key role in its stock market valuation. Having a machine that knows what customers want could be decisive.

UBS continues to expand its ambitions in the region’s affluent market by launching a new digital wealth management platform in mainland China.

UBS has launched a digital-led wealth management platform for affluent clients in mainland China through its wholly-owned onshore entity UBS Fund Distribution (Shenzhen) Company Limited.

The mobile app, WE.UBS, provides financial planning based on big data and views from the bank’s chief investment office. The product shelf includes local and global investment solutions in collaboration with other international asset managers in mainland China including UBS SDIC Fund Management, Invesco Great Wall Fund Management, and HSBC Jintrust Fund Management.

A notable feature of the offering is the ability for clients to complete onboarding in as fast as seven minutes with just an ID card, a selfie and a couple of clicks.

According to APAC co-head of wealth management Amy Lo, the new offering targets individuals in mainland China with a net worth of $150,000 to $1 million – a significantly lower minimum level for the Swiss private bank, which has been traditionally focused on millionaires and beyond.

In August, the bank also introduced a new private clients team dedicated to individuals in Greater China with $1 million to $5 million. It aims to double the number of clients in the segment over the next three years.

As a global wealth manager, we know that one size does not fit all. We have the critical size and scale to specialize and tailor-make different product platforms for different types of clients.

Based in Shenzhen, UBS FS will initially focus on acquiring affluent clients in the broader 11-city Greater Bay Area megalopolis with over 86 million residents and a GDP of 12.6 trillion yuan ($1.7 trillion).

Demand for professional wealth management services delivered digitally is growing exponentially in China. Following our launch in Shenzhen, we will focus on clients in the GBA before broadening out to other cities,» said Iqbal Khan, president of global wealth management at UBS.

China is leading the way in wealth creation and digital transformation globally. As the world’s largest wealth manager, our goal is to be the leading global wealth manager and the #1 digital-first wealth advisor for our targeted clients in China, added APAC president Edmund Koh.

Faced with a variety of challenges, UBS saw profits contract in all of its major units. Switzerland’s largest bank booked a net profit of $1.733 billion in the third quarter, helped by rising interest rates around the globe and expense controls contributing to the solid performance in the third quarter. Nevertheless, profits are 24 percent lower than in the same period a year ago, UBS said in a statement.

Although pre-tax profit fell 19 percent from a year ago to $2.3 billion, it was the ninth consecutive quarter they were above $2 billion.

The macroeconomic and geopolitical environment has become increasingly complex. Clients remain concerned about persistently high inflation, elevated energy prices, the war in Ukraine, and (the) residual effects of the pandemic. In Switzerland, many of our retail and small business clients will also be impacted by disruptions across the rest of Europe,» said UBS CEO Ralph Hamers.

On a diluted basis, earnings per share were $0.52 in the third quarter after $0.61 in the second and $0.63 in the third quarter of 2021.

Pre-tax profits in Global Wealth Management (GWM) were $1.5 billion, down 4 percent from the same year-ago period, while falling 7 percent during the first nine months of the year. The results are well below UBS guidance of 10-to-15 percent for the cycle

Despite the challenges, the world’s largest wealth manager could still attract net new money. In the third quarter, the GWM unit took in $17.1 billion of net new money, bringing the total to  $36.9 billion for the first nine months of the year.

Fee-generating assets fell to $1,182 trillion in the third quarter, marking a 5 percent contraction from the $1.244 trillion in the second quarter and a drop of 16 percent from the $1.412 trillion a year ago.

GWM revenues fell 4 percent compared to a year ago to $4.8 billion, which included a $133 million gain from the domestic wealth management business in Spain and $86 million from the disposal of UBS Swiss Financial Advisors. There was also a $100 million gain from the sale of its domestic wealth management business in Austria.

Central banks raising their interest rates helped the unit as well which saw net interest income increase 23 percent, even though overall deposits decreased, driven by higher deposit revenues, the result of rising interest rates.

In the Asset Management unit, net new money was $17.9 billion.

The bank bought back $1.0 billion of its shares during the third quarter, bringing the year-to-date total to $4.3 billion, with a total buyback of $5.5 billion planned for 2022.

UBS reported a Tier 1 capital ratio of 14.4 for the third quarter, down from 14.9 a year ago, although slightly higher than the 14.2 in the second quarter. It had a CET 1 leverage ratio of 4.51 percent, with both third-quarter figures exceeding guidance of around 13 percent and above 3.7 percent respectively.

The bank’s return on CET 1 capital was 15.5 percent in the quarter and 17.8 percent through the first nine months of the year, within the guidance range of 15 to 18 percent.

The number of full-time employees (FTEs) stood at 72,009 at the end of the third quarter, up from 71,294 in the second quarter, and higher than the same quarter a year ago when the number of FTEs was 71,427.

Despite the higher headcount, personnel costs fell by $282 million to $4.2 billion, driven by lower compensation for financial advisors.

UBS expects that the muted private client sentiment in activity evident in the third quarter may continue in the fourth quarter in the face of myriad economic and geopolitical challenges.

Lower asset values will hurt UBS’s recurring net fee income, while the weak client sentiment may affect net new assets in the asset-gathering business. On the other hand, higher interest rates are expected to positively impact net interest income.