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Comment: Wealthy await more signs of recovery at UBS

Few would argue that UBS is not beginning to improve the performance of its wealth management business. But some may question if the wealthy have regained the same level of trust they gave UBS back when it was the pre-eminent wealth manager in the world, writes David Bain.
 
Tuesday's announcement of the bank's second quarter results show outflows from UBS' global wealth management business continuing to fall after the record amounts leaving the bank in 2009.
 
Outflows, which include its Americas business, were a shade less than SFr8 billion, compared with more than SFr15 billion in the first quarter and the abysmal SFr45 billion that left the bank's wealth units in the last quarter of 2009.
 
In its second quarter results, UBS said inflows were strong into its Asian wealth business, good in some parts of Europe and positive for its ultra high net worth business.
 
Outflows, said the bank, also continued in its cross-border European wealth business – in other words, from offshore accounts.
 
That might suggest that when it comes to such accounts, few are willing to leave their money with UBS, not least because of the bank's episode with the US authorities concerning offshore accounts held by US citizens at the Swiss bank.
 
That episode has pretty much come to an end, but UBS's offshore banking image has been hurt by the affair. This business might never recover given the wider developments around the issue of holding offshore money.
 
UBS will also be looking at the results of its across town competitor, Credit Suisse, which has stolen a lot of wealth management business away from UBS in the last few years.
 
Last week, Credit Suisse said it scooped up around SFr25 billion of new money for its wealth units in the first half. Interestingly, that's just a little more than how much UBS lost from its various wealth businesses in the same period.

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