A year marked by strong inflows and the acquisition of ACPI
Net asset inflows totalled CHF 7.3 billion at the end of 2018, of which CHF 4.7 billion in net new money, equally balanced between private and institutional clients, and CHF 2.6 billion from the acquisition of ACPI, which was completed at the end of the year. This growth made up for the difficulties in the stock and currency markets, in particular the strength of the Swiss franc against the euro (which had a negative impact of CHF 1.2 billion). UBP’s assets under management reached CHF 126.8 billion, a 1.2% year-on-year rise.
Income rose by 1.6% to CHF 1.06 billion. The interest margin grew sharply (+8.2%), while the slowdown in brokerage (-16%), due to the low volume of transactions in the second half of the year, was offset by the upturn in management and advisory fees. The proportion of clients with their assets managed in mandates or in funds has now increased to more than 60%.
Operating expenses amounted to CHF 698 million for 2018 (versus CHF 673.1 million in 2017). Costs remain under control (+3.7%) and are mainly attributable to non-recurring charges (CHF 7.2 million) generated by the acquisitions of ACPI in London and Banque Carnegie Luxembourg (which is expected to be finalised at the end of January 2019), and to recruitments in Asia and the Middle East. Furthermore, UBP made substantial investments in the digital and IT arenas, most notably having entered into a partnership with IBM for the development and maintainance of its IT platforms.
UBP posted a 2018 operating result of CHF 257.5 million before provisions (compared with CHF 271.2 million in 2017), and a net profit of CHF 202.4 million, compared with CHF 220.4 million the previous year; an 8.2% decline (or -5.2% excluding non-recurring costs). The cost/income ratio for the year was 65.8% (compared with 64.4% in 2017).
“We continued to invest in both our offering and our resources amid declining markets and a clear drop in client transaction volumes. The acquisitions of ACPI and Banque Carnegie will allow us to step up our growth in Europe, and the recruitment of new teams in Asia and the Middle East reflects our ambitions in those priority markets. This year’s strong net inflows are the reward for our teams’ hard work in meeting the expectations of our clients, who seek tailored and innovative solutions”, said UBP’s CEO Guy de Picciotto.
The balance sheet is stable at CHF 32.6 billion (CHF 32 billion a year ago), and the Tier I ratio, at 26.6%, remains well above Basel III and FINMA minimum requirements.
This careful balance sheet management makes UBP one of the best-capitalised and strongest banks among its peers, as attested by the recent long-term Aa2 deposit rating assigned to it by Moody’s.
UBP thus has the financial means required to continue its development both in Switzerland and worldwide.
Re-disseminated by The Asian Banker