Another 10% comes from Personal & Corporate Banking, 30% from the Investment Bank and 10% from Asset Management. Across the group, $4 trillion in assets under management drives steady revenues with half the world’s billionaires being UBS clients.
Swiss Banks were previously known for their legal duty of secrecy and confidentiality. Times have changed and the Swiss now more readily participate in disclosing tax-avoidance to other regulators. That said, the bank suffers from a French case regarding UBS facilitating tax avoidance in the “noughties”. UBS is appealing against its €4.5 billion fine with judgement expected soon. With a market capitalisation of €56 billion, the fine is meaningful.
Leaving the outcome of the legal appeal aside, it looks as if the general consensus is for strong loan growth which should translate into low double digit growth in net interest income (about 20% revenues). Non-interest income looks to be on the upward trajectory such that the bank might start delivering acceptable returns. Relative to other banks, UBS’s loan book is seen as low risk, which helps the investment story. The risks are more tax avoidance litigation or an adverse outcome in the French case.