EUROPE – Swiss bank UBS is to create a holding company to incorporate its five independent private banks and GAM, its specialist portfolio and asset manager - together they run 70 billion Swiss francs (47.6 billion euros) in assets on behalf of their clients.

GAM and private banks, Armand von Ernst, Banco di Lugano, Bank Ehinger, Cantrade and Ferrer Lullin will be incorporated into one common platform during the first half of 2003. The aim is to target economies of scale “not achievable by each organisation on its own”.

In addition GAM will be encouraged to build up its own private client base and to become the investment management centre for the new company.

The new company will be chaired by Hans de Gier, currently UBS executive vice-chairman. De Gier will lead the strategic reorganisation and integration efforts. Joining him on the board as deputy chairman will be Georges Gagnebin, chairman of UBS wealth management and business banking, and Peter Kurer, UBS general counsel.

UBS has also announced its 2002 results. UBS Global Asset Management saw 2002 pre-tax profit decline by one third to 187 million Swiss francs (127 million euros) compared to 2001, but the annual report said that “most of UBS Global Asset Management’s funds continued to show a strong relative investment performance in the one-year, three-year and five-year periods”.

In the fourth quarter of 2002, UBS Global Asset Management posted a pre-tax profit of 27 million Swiss francs (18 million euros) – an increase of one million Swiss francs since the third quarter. In the institutional business, net new money totalled 2.4 billion Swiss francs (1.63 billion euros) for the fourth quarter, compared to outflows of 3.2 billion Swiss francs in the third quarter – “thanks to strong inflows in fixed income and equity mandates”.

In its wholesale intermediary fund business, UBS Global Asset Management recorded an outflow of net money of 0.2 billion Swiss francs in the fourth quarter, compared to a positive inflow of 1.3 billion Swiss francs in the third quarter.

Going forward, UBS does not expect to see an immediate pick up in its financial performance, as depressed asset levels, low investor activity and possible deterioration of the credit environment weigh on revenue. Commented Peter Wuffli, president of the group executive board: “We will continue to monitor our cost base carefully, investing selectively in our strategic priorities.”

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