UBS’s De-Risking Pays Off

UBS AG (NYSE:UBS) reported better results for its first quarter as efforts to curtail risk and a shift in focus in favor of asset management for the wealthy started to pay off.

In a message reflecting its confidence that the business is emerging from the shadows of the financial crisis, the tax row with the U.S., and a massive trading loss last year, UBS said: “We believe our wealth-management businesses as a whole will continue to attract net new money, as our clients recognize our efforts and continue to entrust us with their assets…We have the utmost confidence in our firm’s future.”

The wealth management business reported higher pre-tax profits in the quarter and garnered about $12.1 billion in new clients’ assets.

Excluding the charge for the accounting loss on its own credit, the bank’s earnings came up ahead of analysts’ expectations.

The investment banking operations saw a fall of 24 percent to 730 million Swiss francs from 965 million francs. However, revenues have been improving since the fourth quarter on the back of better business in the fixed-income division.

The private banking business saw an increase of 24 percent in pre-tax profit to 803 million francs on the back of improved inflows from wealthy clients in the Asia Pacific and other emerging markets, and also a doubling of the assets under management at the U.S. unit.