Fewer private bankers, more profit: UBS’s good quarter in Asia
Unlike HSBC and Morgan Stanley, UBS, Asia’s largest private bank, hasn’t been grabbing the headlines for its hiring recently – it’s headcount of relationship managers is actually down on last year in Asia. But there’s good news for the Swiss bank’s current RMs in Singapore and Hong Kong: they are now managing more assets per head, as profit surges in wealth management in their region.
In UBS’s global wealth management unit, profit before tax increased by $215m year-on-year to $398m in Q1, driven by a 273% rise in revenue to $795m, on the back of “higher transaction-based income”, according to the bank’s financial results. Asia generated almost a third of the wealth division’s $1.22bn profit for the opening quarter.
“Asia had its best quarter on record. Here we saw profits double, with outstanding transaction revenues supported by very high demand for structured products,” UBS CEO Sergio Ermotti said earlier today, referring specifically to wealth management.
UBS’s Asian wealth profit was more than 2.5 times the $144m that HSBC made from its regional private banking operations in Q1. While HSBC has been hiring aggressively in Asian private banking, however, UBS has taken the opposite approach and appears to be focused on making its existing RMs more productive.
The Swiss bank’s headcount of Asia-based client advisors (its name for RMs) was 1,013 at the end of March, down by 123 compared with the same time last year, but still 393 ahead of main rival Credit Suisse.
The fall is not as surprising as it may seem, however. UBS achieved its headcount dominance in the sector more than a decade ago and has since kept its RM workforce between about 1,000 and 1,100, partly by weeding out underperformers and removing management layers. As many other firms rushed to hire to cash in on surging Asian wealth, the compound annual growth rate of UBS’s Asian headcount was -1.2% between 2015 and 2019, according to new data from Asian Private Banker.
If you’re an RM at UBS in Asia, you probably enjoyed a strong first quarter. Assets under management per head in Asia (total AUM divided by RM headcount) increased 12% to reach $400m.
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