UBS axes staff as profits plunge 16pc

Business | Agencies and Stella Zhai 23 Oct 2019

Swiss bank UBS is axing high-paying investment banking staff after it saw a 16 percent drop in net profit in the third quarter this year, mainly due to 59 percent slump in the investment banking business.

Chief executive Sergio Ermotti announced a further US$90 million in expected annual cost savings at the investment bank.

The bank also said it expects to take restructuring expenses of around US$100 million in the fourth quarter related to structural changes it is making to the business.

The group, however, brought in net new money of US$15.7 billion in its flagship wealth management business in the three months through September, most of that from Asia, helping lift assets overseen for the affluent to a record US$2.5 trillion, it said.

Meanwhile, UBS Global Wealth Management Chief Investment Office expects the annual issuance of Asian green bonds to surge twofold to US$150 billion (HK$1.17 trillion), driven by the increasing financing demand for infrastructure.

Regulators are driving sustainable investing in the region, said Carl Berrisford, equity analyst of UBS Global Wealth Management CIO, pointing out that Hong Kong Stock Exchange has further introduced five key environmental, social and corporate governance performance indicators in January.

His comments came as the bank launched the SDG Engagement High Yield Fund, which contains lower-rated high-yield corporate bonds that show the companies' willingness and ability to deliver change related to the United Nations Social Development Goals.

The new fund takes a 2 percent exposure in its 100-percent sustainable cross-asset portfolio.

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