At first glance, UBS’s Asian private bank seems to be all about hiring. Last year alone, the Swiss firm added 101 relationship managers in Asia – a colossal number in a tight job market – to cement its position as the largest wealth manager by regional front-office headcount. By contrast, second-placed Credit Suisse saw its RM workforce fall to 580, a drop of 10, over the same period, and it is now using bonus claw backs to keep its best private bankers on board.
UBS’s annual report, released last week, states that there will be “business growth” in wealth this year and that it will primarily occur in Asia and the US.
But if you’re a private banker thinking of moving to UBS in Singapore or Hong Kong, be cautious: you will be under extra pressure to perform in tough market conditions. Some of UBS’s numbers aren’t looking too rosy right now, according to CEO Sergio Ermotti, speaking at the Morgan Stanley European Financials Conference yesterday.
Year-to-date revenues in wealth management are down about 9% from 12 months ago, although the gap is narrowing over the course of the quarter, Ermotti said. Transaction-based wealth income, in particular, remains “under pressure” and could be down by roughly 25%, mainly because of falls in Asia.
Why? UBS’s most recent client survey paints a rather somber picture on this year’s outlook amid political tensions, trade-tariff disputes, and concerns about slowing economic growth in Asia, Ermotti explained.
This is all cold comfort to UBS’s Asian private bankers, who have already felt the heat during the previous quarter. Average assets under management per banker (regional AUM divided by banker headcount) at UBS in Asia fell by 8% quarter-on-quarter in Q4 to $314m, while private bankers in Asia took in 40% less new money in 2018 than in the previous year, the firm’s 2018 financial results reveal. In Q1, however, net new money globally should “be positive and within our target range”, Ermotti said, without commenting specifically on Asia.
Market conditions and negative client sentiment will likely affect the Asian results of many private banks in Asia this year. But Ermotti’s statements suggest UBS’s business and headcount expansion in Asian wealth management will be much less striking in 2019 than it was in 2018.
This is in keeping with his new approach to recruitment across divisions globally. UBS will be slowing down its hiring, and “pacing” its re-hiring (implying that vacancies will go unfilled for longer).
A headhunter we spoke with agreed. UBS will keep on hiring private bankers in Asia this year, but at a slower rate than in 2018, he says.
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