The Wealth Management Americas business at UBS logged record revenues in the second quarter of 2014, while invested assets crossed the $1 trillion mark for the first time, the Zurich-listed bank said today.

The Wealth Management Americas business at UBS logged record revenues in the second quarter of 2014, while invested assets crossed the $1 trillion mark for the first time, the Zurich-listed bank said today.

Within WMA, adjusted profit was $246 million, while operating profits fell 13 per cent quarter-on-quarter to SFr211 million ($233 million). Operating income increased 1 per cent to $1.89 billion, reflecting continued growth in managed account fees and higher net interest income.

The Americas business’s operating costs included $44 million of charges related to litigation and regulatory matters. There were $2.5 billion of net outflows in the quarter, mainly as a result of clients taking out money to pay seasonal income tax bills. UBS said this business maintained its adjusted cost/income ratio and its gross income on invested assets within its target ranges. It also logged record invested assets per financial advisor of $143 million, up 13 per cent  from $126 million in Q2 2013. Financial advisor headcount is 7,119 for the second quarter, up slightly from 7,099 a year ago.

The wealth management arm of UBS as a whole reported a 43 per cent fall in operating profit in the three months to end-June, at SFr355 million ($392 million), compared with the previous quarter, while overall group profits fell 13 per cent over the same period to SFr1.218 billion.

Adjusted pre-tax profit in the quarter was SFr393 million. The figure was affected by provisions for litigation, regulatory and similar matters, the Zurich-listed bank said today. When those charges are taken out, performance was “resilient at SFr684 million”, UBS said. Lombard lending, mandate sales and invested assets all rose, but were offset by lower transaction-based income on low volatility and volumes.

Gross margin on invested assets fell 3 basis points to 84 bps; the adjusted cost/income ratio, the bank said, was above its current target range (but it gave no figure). Net new money remained “very strong” at SFr10.7 billion and the bank logged an annualized rate of net new money growth at the upper range of its target.

For the entire group, UBS said it booked a total profit of SFr1.218 billion, down 13 per cent on the previous quarter.

The bank said it had a fully applied Basel 3 common equity tier 1 ratio of 13.5 per cent.

Across the entire group, regulatory, litigation and related costs totaled SFr254 million.

Germany

During the quarter, UBS resolved a cross-border tax dispute with Germany. The settlement, including a payment of around €300 million ($402.8 million), concluded the matter. UBS has provided for around SFr120 million related to this issue in its results.

It said that more than 95 per cent of its German clients have either given UBS evidence they are complying with tax or have completed a voluntary compliance program – UBS said it wants to reach a 100 per cent compliance result by the end of 2014.