UBS Improves Profits 32%; U.S. Advisors Top $1M in Average Fees

UBS (UBS) said Tuesday that its second-quarter profit improved 32% to 690 million Swiss francs ($742 million), or 0.18 Swiss francs per share, from 524 million Swiss francs ($563 million), or 0.14 Swiss francs per share, a year ago. (In the first quarter, profits were 988 million Swiss francs–about $1.06 billion–or 0.26 Swiss francs a share.)

Sales across the company grew 15% year over year to 7.4 billion Swiss francs ($8 billion), though they dropped 5% from the earlier quarter.

"I am very pleased with our performance this quarter. The results show that our strategy is right, and we're ahead on execution,” said Group CEO Sergio P. Ermotti, in a statement. “Every quarter since we set the strategy in 2011, we have executed it in a very clear and disciplined way building an unmatched capital position and delivering for our clients.”

The non-U.S. Wealth Management operations delivered their “highest profit in four years excluding charges related to the Swiss-UK tax agreement and restructuring costs” while drawing “robust inflows,” the company said.

Wealth Management Americas

The group’s financial-advisor headcount grew by 34 from last quarter and by 78 from last year to 7,099.

Invested assets per financial advisors stand at $126 million, close to last quarter’s results and up 11% from $114 million in the year-ago period.

Average annualized fees & commissions per financial advisor are $1,012,000–an improvement of 3% from $984,000 in the first quarter and up 12% from the second quarter of 2012.

(Rival Merrill Lynch (BAC) said that its advisors also have yearly production levels of over $1 million, though Morgan Stanley’s reps (MS) have annual fees & commissions of $866,000 as of June 30.)

In Wealth Management Americas, net new money totaled 2.7 billion Swiss francs ($2.8 billion), a drop from 8.6 billion Swiss francs ($9.2 billion) in the first quarter and from 3.7 billion Swiss francs ($4 billion) in the prior quarter. (The unit has had 12 consecutive quarters of net inflows, and its results exclude interest and dividend income.)

“The second quarter result mainly reflects outflows related to financial advisors employed with UBS for more than one year and included client withdrawals of around 2.2 billion Swiss Francs or $2.5 billion associated with annual income tax payments as well as seasonal declines compared with the first quarter,” the company explained in a report.

As a result, the annualized net new money growth rate for the second quarter was 1.3% vs. 4.4% in the prior quarter and below the target range of 2% to 4%, according to UBS.

Overall, the unit had a pretax profit of $258 million, up 3% from $251 million in the prior quarter and a jump of 21% from $214 million a year ago.

Assets stood at $892 billion as of June 30, a slight increase from $891 billion on March 31 and an increase of 12% from $797 billion last year.

Revenues for the unit expanded 13% year over year and 3% from last quarter to nearly $1.8 billion.

In other news, UBS says it plans to acquire SNB StabFund’s equity in the fourth quarter, which should improve its BIS Basel III CET1 capital ratio by an additional 70 to 90 basis points.