UBS became a favourite with investors and the envy of European rivals after Chief Executive Officer Sergio Ermotti scaled back its trading unit to focus on managing the more than $2tril that wealthy customers have at the bank.
Bloomberg News reports that three years on, as Credit Suisse and Deutsche Bank struggle to catch up - ordering management shakeups and sweeping job cuts designed to shrink their securities businesses - UBS is facing fresh hurdles of its own.
UBS clients in regions including Brazil, Russia, the Middle East and Asia, reacting to losses in stock markets or businesses exposed to energy prices, sat out the turbulent second half of 2015 and yanked a net $3.3bn in assets. With markets still churning early this year, the bank may be headed for a third straight disappointing quarter in wealth management, its biggest division.
“With lower assets under management and lower margins, there is going to be a double whammy to revenues,” said Andreas Venditti, an analyst at Vontobel with a buy rating on the stock. “People might underestimate that wealth management is a cyclical business,” like investment banking.
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