EUROPE – UBS has declined to comment on the future of its asset management business after the Swiss bank announced the closure of its investment bank’s fixed income arm.
The closure, announced yesterday as part of the bank’s third-quarter results, comes as UBS seeks to “exit lines of business that do not meet their cost of capital sustainability”.
In a statement, it added that the investment bank would remain focused on advisory and research, as well as dealing in equities, currencies and precious metals.
Asked about the fate of its asset management business – following speculation over the summer over an aborted merger with State Street – a spokeswoman for the banking group in London declined to comment.
Calls to UBS spokespeople in Zurich with the same questions went unanswered at the time of writing.
According to its third-quarter results, the global asset management business saw pre-tax profit increase by CHF6m (€5m) to CHF124m as a result of increased performance fees in its alternative and quantitative investment mandates.
This offset a CHF16m increase in operating costs quarter-on-quarter.
Its net new inflows, excluding money market transactions, declined over the second quarter to CHF300m, down sharply from CHF3.4bn for the three months to June.
The end of the investment bank’s fixed income focus comes as it reported a pre-tax loss of CHF2.8bn, the result of an impairment loss to a goodwill impairment test it conducted.
Over the third quarter, revenue from its fixed income, currency and commodities activity remained “broadly flat”, while revenue from equities increased by more than CHF500m to CHF783m quarter on quarter.