UBS’s growth engine appears to have blown a gasket. The $50 billion Swiss wealth manager’s shares fell 6% on Tuesday after it revealed that well-heeled clients had all but stopped handing over new money to invest. It’s a setback for Chief Executive Ralph Hamers’ mission of earning a valuation multiple closer to U.S. rival Morgan Stanley .
One of the first numbers investors look for in UBS earnings is “net new fee-generating assets”, a measure of whether clients are pulling their cash or handing UBS more money to invest on their behalf. The good news is that the figure was positive in the second quarter, despite the market storm. The bad news is that, at just $400 million, it was far lower than the quarterly average of $18.6 billion since the start of 2020. UBS even lost $3.5 billion of assets in the Americas.
to 2022. And the end of the U.S. tax year arguably skewed the second-quarter numbers. Clients liquidated about $10 billion to pay Uncle Sam his dues, according to a person familiar with the matter.Nonetheless, investors aren’t used to hearing such excuses from UBS. The U.S. outflows compared with a healthier $3.7 billion going the other way during the third quarter of 2020, the period in which the U.S. tax year ended during the first phase of the global pandemic.
The upshot is that investors may have to reassess UBS’s immediate growth prospects. Analysts were expecting $58 billion of new fee-generating assets in 2022. Halfway through the year, Hamers is only one third of the way there. He could argue that the long-term trends are unchanged. Hamers is investing in digital wealth-management in the United States, and UBS seems well-placed to benefit from the growing ranks of Asian billionaires.
Revenue from its core wealth management business fell 2% year-on-year to $4.7 billion. The division boosted its fee-generating assets under management by $400 million, excluding the effects of stock-market swings. That compared with a rise of $25 billion in the same three-month period during 2021.Register now for FREE unlimited access to Reuters.com
Norge Siste Nytt, Norge Overskrifter
Similar News:Du kan også lese nyheter som ligner på denne som vi har samlet inn fra andre nyhetskilder.
TV-featured Turks & Caicos luxury villa hits market for $30MFor the price of a discount NYC mansion, this entire slice of paradise could be yours.
Les mer »
Harley Quinn cements itself as one of the most underrated shows on TVNow on HBO Max, the animated series serves up a wild combination of emotional honesty, filthy humor, and graphic violence
Les mer »
Breakingviews - Philips is running out of chances to reassurePhilips’ problems are mounting faster than Chief Executive Frans van Houten can treat them. Six months after seeing its shares slump on disappointing sales guidance, the 17 billion euro medical technology group has served up a repeat. Van Houten has cut his estimate for full-year sales growth to between 1% and 3%, from 3% to 5%, blaming Chinese lockdowns and the Ukraine war.
Les mer »
Breakingviews - Alibaba dual play is open sesame to China buyersThere’s a certain magic to governance tweaks that boost market value by $12 billion instantly. Alibaba’s Tuesday announcement that it will upgrade its Hong Kong listing to primary status alongside its New York one did just that with an initial 5% bounce. That paves the way for the $273 billion Chinese e-commerce titan to be included in the trading link between Hong Kong and mainland bourses, allowing investors in Shanghai and Shenzhen their first chance to buy shares directly.
Les mer »