Investments paying off
Bullish financial markets helped increase revenue to CHF 1.045 billion from CHF 934.6 million in 2016. Revenue growth was also driven by a 14.2% rise in fees and commissions, a result of significant growth in advisory and discretionary mandates among private clients, and by an increase in interest income of CHF 25 million (10.1%) due in particular to higher dollar interest rates.
Operating expenses remained under control, rising by 5.5% from CHF 634.7 million in 2016 to CHF 669.6 million in 2017. The increase resulted mainly from the full impact of the Coutts integration in Asia (completed in April 2016), as well as added recruitment in that region. Operating expenses also rose due to the higher cost of regulatory compliance as well as major investments in the digital offering.
Operating income before provisions rose 41.4% to CHF 271.2 million, up from CHF 191.9 million in 2016. The increase was driven by the brokerage and advisory businesses, underpinned by strong returns on the products of the Asset Management division, and also by innovative new investment offerings.
The Group was, therefore, significantly more profitable in 2017, with net profit rising 25% from CHF 176.4 million in 2016 to CHF 220.4 million in 2017, and with the cost/income ratio improving to 64.1% versus 67.9% in 2016.
At 31 December 2017, assets under management reached CHF 125.3 billion, up 5.9% (CHF 7 billion) compared with the previous financial year (CHF 118.3 billion at the end of 2016). Rising markets, net inflows from institutional investors (CHF 2.5 billion) and new money from private clients in emerging countries more than offset outflows resulting from further tax regularisations, mainly by non-European clients.
“Although these results are, in part, due to positive economic conditions and buoyant markets, they above all reflect the efforts and investments we have made over the last few years, particularly in Asia. Our 2017 performance was achieved in the context of a favourable economic environment, but it was also supported by a Swiss banking industry that is in good health,” said Guy de Picciotto, UBP’s CEO.
At the end of 2017, the Group’s balance sheet totalled CHF 32 billion, up CHF 1.2 billion compared with the 2016 year-end figure of CHF 30.8 billion. The Tier 1 ratio was 27.4%, well above the minima required by Basel III and the FINMA.
The Bank’s prudent management of its balance sheet is also reflected in its short-term liquidity ratio which, at 278.4%, is 2.8 times the minimum required by Basel III.
UBP is one of the best-capitalised banks in its field and has the necessary means to ably develop its wealth management business for both private and institutional clients.