Union Bancaire Privée’s assets under management (AUM) totalled CHF 147.4bn ($166.5bn) at the end of 2020, up by 5.1% or CHF 7.1bn from the previous year, according to the bank’s annual results.
The increase in AUM was driven by CHF 8.97bn of net new money in 2020, which is double compared to inflows in 2019, the firm noted. Net inflows came from private banking clients in the firm’s main markets, which include Switzerland, the Middle East, Europe and Asia.
These inflows offset the negative exchange rate effects of CHF 7.3bn over the year, UBP noted.
Income remained stable at CHF 1.07bn, which was 0.4% higher than in 2019, despite a significant deterioration in net interest margins of CHF 74.6m due to the decline in US rates.
However, this was compensated for by an increase in net income from fees and commissions (CHF 58.8m, 5.8% increase from 2019) linked to the increase in AUM and a high level of client transaction volumes.
Operating expenses decreased slightly by 0.9% to CHF 718.4m, even taking into account the substantial investments made through out the year. According to UBP, it invested in digital capabilities, particularly communication tools and technology that allowed it to successfully maintain business continuity throughout the health crisis, and in new team hires in key growth markets.
Net profits were 3.4% lower than in 2019 (1.9% higher if excluding the previous year’s one-off gain). Profits were CHF 181.4 million, down from CHF 187.8 million the previous year, when the exceptional gain following the sale of a building in London was booked.
In Asia, the bank said that investors are further inching towards discretionary portfolio management (DPM) services, partly driven by the market volatility caused by Covid-19.
“The challenging market environment that we all went through during the first quarter was quite unprecedented, and that opened the eyes of a lot of investors who were quite sitting comfortably over the last eight-to-10 years,” Paras Gupta, DPM head for Asia at UBP, said previously.