As European banks report their latest quarterly results, many have benefited from robust investment banking business and inflows at wealth management units. UBS isn’t one of them.
The Swiss bank reported disappointing results today [subscription required], especially at its wealth management division. The traditional profit driver at the bank has seen a steady outflow of client funds after a damaging investigation into tax evasion by the American authorities tarnished the group’s reputation. Having settled with the authorities in August, the bank is now on the “long haul of restoring our reputation,” finance chief John Cryan said. The path will be “wobbly”, he added.
Private banking is currently one of the liveliest sectors in financial services [sub req], with banks scrambling for the wealth-management units put up for sale by the likes of ING and RBS. The accelerating outflows at UBS are in sharp contrast to swelling coffers at key competitors. Once one of the most venerable names in wealth management, UBS is the latest example of the management mantra about corporate reputations: hard to get, easy to lose.