UBS has long been one of the largest incumbent global players in private banking and wealth management. It has successfully parlayed its strength into on-going growth in Asia via new schemes in China, Japan and Singapore, hitting a record operating income of US$795 million in Q1 this year. This gives UBS as strong a foothold in the region as anywhere else in the world, winning it the Outstanding Global Private Bank: Asia-Pacific category at the online Private Banker International (PBI): Global Wealth Summit & Awards 2020.
Transactional revenues increased by 93% year-on-year (YoY) last year, reaching another record high of US$374m, no doubt helped by volatility in the market. UBS is today double the size of its nearest competitor in Asia-Pacific (APAC), says the bank, judged by assets under management (AUM), which reached US$411 billion last summer, the first time the US$400bn milestone has been surpassed in APAC.
The global wealth management (GWM) unit in APAC also saw a record high of US$31bn in Net New Money (NNM), making APAC the region with the highest NNM growth globally in UBS at 8.8%. The first quarter of this year saw a high three-month NNM record with US$16.3bn posted, a 160% YoY jump and highest ever quarterly rise.
UBS’ success has been helped by increasing its staff to 2,500 employees including 1,130 advisors, who almost half (43%) have five years’ worth of experience with the bank. A fifth (20%) have been there for 10-20 years. It is increasing its regional fooptprint and services in:
China: In 2019 UBS’ wholly owned bank, UBS (China) Limited (UBSCL), received its Renminbi (RMB) license. This enabled the Shanghai branch to launch RMB businesses including signing up onshore high net worth (HNW) clients and sell RMB denominated products. Investing early in this market, means UBS is now one of the few foreign banks with both onshore banking and securities wealth management platforms. It received its license to sell insurance and funds distrubution in 2018.
For the future it’s committed to developing its digital wealth management business in Qianhai, popularly known as China's 'silicon valley'.
Headcount in China is due to double in 2020 to 1200 employees.
Japan: UBS GWM announced a joint venutre (JV) in Q2 2019 with Sumitomo Mitsui Trust Bank (SMTB), the nation's top trust bank. Owned 51% by UBS, this JV will combine the global reach and talents of UBS with SMTB's capabilities. It’s the first such partnership between an international financial group and domestic trust bank. The deal means a wide breadth of services, equal to what UBS already offers clients in Switzerland, can now be offered locally.
Singapore: Opening the philanthropic UBS Optimus Foundation in Singapore in December 2019 means the banks’ Asian clients have greater access to in-situ philanthropic services.
The bank’s drive to deepen its Asian presence has been supported by various initiatives, such as the first 100% sustainable cross-asset portfolio. By February 2020, this had an AUM in APAC of US$1bn+, which is YOY growth of over 140%. It recorded an 18% return in 2019 and now has close to 20% of all such mandates in APAC. UBS’ plans are helped by various digital initiatives as well, such as the UBS Advisor Messaging service on WeChat and WhatsApp unveiled last year. Its future APAC plans include:
Further expansion of the Global Family Group (GFO): This delivers cross-division coverage and access for clients into Investment Bank and Wealth Management offerings, such as trade execution services, via a single contact point. GFO has been in APAC for two years, posting 33% yearly growth since launch, and the bank belives there is further room for expansion.
Greater focus on Ultra HNW (UHNW): UBS GWM in APAC is a huge contributor to UBS’ Global AUM of US$2.6 trillion as the region has a much higher concentration of UHNW clients than any other – 3 out of 5 billionaires in APAC have a relationship with UBS. The UHNW platform supports clients’ investment, business and legacy needs and is buttressed by online and offline communities around topics such as art, philanthropy and entrepreneurship via the evolving Tech Connect platform and events.
Enhance HNW: this core business will be better served by moving decision-making and responsibility for resource allocation closer to the market teams. The move will give advisors more autonomy to increase speed and proximity to clients.
Regionally-tailored solutions: for clients with less complex day-to-day needs is a priority. A new Private Client segment for those with US$ 1 to 5 million in AUM has been created with omnichannel capabilities giving greater convenience and speed.