The Swiss bank announced a raft of management changes, with new leadership in the Americas, as well as adjusted financial targets. It also logged third-quarter results, showing a varied picture in its wealth management businesses.

UBS announced third-quarter financial results in its wealth management business lines in the Americas and rest of the world today, while it also announced a sweeping set of executive changes, including the departure of Robert McCann as head of the Americas business.

The bank also set out adjusted targets for performance in light of what it called “too big to fail” rules governing financial strength of banks and other actions to prevent future state bailouts in the event of market shocks.

Switzerland’s largest bank and the world’s largest wealth management firm said operating profit before tax at its wealth management arm was SFr639 million ($648 million) for the three months to 30 September, down 15 per cent from the previous quarter. At the wealth management business in the Americas, operating profit was SFr259 million, up 36 per cent.

Across the whole of the bank, including other divisions such as investment banking, corporate centre, retail, corporate and asset management, the bank reported an operating pre-tax profit of SFr788 million, down 55 per cent quarter-on-quarter, it said in a statement. On an adjusted basis, profit was SFr979 million.

Net profit attributable to UBS Group shareholders was SFr2.068 billion, with diluted earnings per share of SFr0.54. The third quarter included a net tax benefit of SFr1.295 billion, mainly related to a net upward revaluation of deferred tax assets, SFr592 million of net charges for provisions for litigation, regulatory and similar matters, and SFr298 million of net restructuring charges.

Wealth management adjusted profit before tax, meanwhile, was SFr698 million and it logged adjusted net new money of SFr3.5 billion, excluding the effects of UBS’s balance sheet and capital optimisation programme. Recurring income benefitted from increased mandate penetration and the continued effects of pricing initiatives, it said.

Wealth management in the Americas posted an adjusted profit before tax of $287 million, with recurring net fee income and net interest income at record levels. Net new money was positive at $500 million.

Amended targets
The bank has adjusted some of its financial targets. Its cost/income ratio target remains 60–70 per cent, with a short- to medium-term expectation of 65–75 per cent; it expects to achieve an adjusted return on tangible equity in 2016 at approximately the same level as 2015, an adjusted RoTE of approximately 15 per cent in 2017; it is targeting an adjusted RoTE of above 15 per cent from 2018 onwards.

Group risk-weighted assets (RWA) are expected to trend around SFr250 billion in the short to medium term mainly due to regulatory inflation, it said.

Executive changes
Under a series of changes to top management, UBS said that McCann will assume the role of chairman for UBS Americas and step down from the group executive board at year-end.

Tom Naratil, currently group chief financial officer and group COO, will succeed him as president wealth management for the Americas and president of UBS Americas.

Axel Lehmann is appointed group chief operating officer and steps down from the board of directors; Kirt Gardner is appointed group chief financial officer; Christian Bluhm is appointed group chief risk officer; Kathryn Shih is appointed president of UBS Asia-Pacific; Sabine Keller-Busse, group head of human resources, is to join the group executive board, and Philip Lofts and Chi-Won Yoon are to step down from the group executive board at the end of 2015.

All the changes take effect from 1 January next year.

Commenting on McCann’s six-year tenure at the helm of UBS in the Americas, the bank said in his new role as chairman, he will “focus on clients and stratetic priorities across the region”.

McCann decided to step down from his roles as president Wealth Management Americas (WMA) and president UBS Americas as well as the executive board.

“Over the past six years, McCann successfully turned around WMA making it an important part of the group's profitability and played a significant role in shaping the strategy of the region and the group. He led WMA to achieve $1 million in annual revenue per advisor, $1 billion in annual profit and $1 trillion of invested assets,” the firm said.