UBS hopes Trump policies will boost wealth management

Fri Jan 27, 2017 9:04am EST
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By Joshua Franklin

ZURICH (Reuters) - UBS (UBSG.S: Quote) hopes optimism surrounding new U.S. President Donald Trump's proposed policies will boost its core wealth management business, the Swiss bank said on Friday, after reporting a sharp fall in profits.

With earnings from the wealth management division under pressure, the world's biggest private bank looked forward to growing confidence among U.S. clients who are now planning riskier investments.

"The bad news is that those are plans," Chief Executive Sergio Ermotti told a news conference on Friday. "Before they translate those plans into action they want to see the outcome of the first 100 days of the new administration."

Follow-through action would be a boon for income earned from fees and transactions at UBS's North American wealth management business, and could also benefit its investment bank.

But the optimism has not reached Europe or Asia, where clients are still averse to taking on too much risk, Ermotti cautioned.

Transaction-based income at UBS Wealth Management, which does not include North America, fell to the lowest level on record in the fourth quarter.

The unit's overall operating income also fell for the seventh straight quarter.

"If clients do not want to trade there's only so much you can do," said Vontobel analyst Andreas Venditti, who rates UBS's stock a "buy".   Continued...

FILE PHOTO: The logo of UBS is seen outside the building housing the headquarters of the Swiss bank in San Juan, Puerto Rico, July 31, 2015. REUTERS/Alvin Baez/File Photo