Swiss bank UBS on Tuesday saw its revenues from investment banking fall, but reported a Q3 profit of $1.7 billion, which beat analysts' estimates, compared to a loss of $575 million in Q3 of 2009. A Thomson Reuters analyst poll predicted Q3 results of $1.25 billion.
In the United States, UBS wealth-management advisors put a stop to client outflows — a significant development after five quarters of outflows, experts say, though the wealth business in the Americas had a loss of about $47.6 million.
"It is certainly good news that they were able to stem negative asset flows," said New York-based executive search consultant Mark Elzweig (left) in a phone interview. "One helpful factor is that Bob McCann and the management team are inspiring confidence in the UBS salesforce."
Wealth Management, Americas
In the Americas, net client asset inflows were about $305 million. However, in the United States, net new money inflows were "virtually zero compared with outflows of CHF 2.9 billion ($3 billion) [a year ago], due to improved flows from financial advisor recruiting and retention," the company said in its third-quarter report.
In addition, net new money inflows from financial advisors employed with UBS for more than one year dropped slightly from the prior quarter, but remained positive for the third consecutive quarter, UBS says.
Including interest and dividend income, wealth-management operations in the United States had net new money inflows of 4.6 billion ($4.7 billion) in the third quarter.
Invested assets for wealth-management Americas totaled CHF 693 billion ($701 billion) as of September 30, down CHF 1 billion from last year. Total client assets, though, were CHF 743 billion ($752 billion), up slightly from the same year-ago period.
For the first nine months of 2010, U.S. advisor net outflows were CHF 9.3 billion ($9.4 billion) vs. inflows of CHF 1.5 billion ($1.52 billion) in the same period of 2009.
Advisor Headcount
The number of financial advisors with UBS-Americas is 6,783, down 503 from 7,286 a year ago. Still, the group added 23 advisors in the most recent quarter.
Group CEO Oswald J. Grübel (left) said in a statement: "The third quarter was unusual in that there were very low levels of client activity as well as a strengthening of the Swiss franc against most major currencies. This had an impact across all of our businesses. However, we are optimistic that an uptick in the fourth quarter will benefit all of our business divisions. We remain confident about our future and believe that we are on track to achieve our medium-term goals."
