owns and losses from the credit crisis among European competitors, and had to turn to the Swiss government a year ago for a 6 billion-franc capital injection to help it spin off risky assets into a Swiss National Bank fund. The bank reported a net loss of 21.3 billion francs last year, a record in Swiss corporate history.
“The pressure is now mounting to demonstrate that the group is turning around, specifically with respect to the private banking franchise,” JPMorgan Chase & Co. analysts led by Kian Abouhossein said in a note yesterday. They have a “neutral” rating on UBS.
Shrinking Margins
UBS is not only seeing clients withdraw funds from its wealth management unit, the bank is also earning less on the remaining 1.68 trillion francs of assets under management, the earnings release showed.
“The dash-to-cash hit UBS’s margins harder than any other private banking division we cover,” van Steenis, a London-based analyst at Morgan Stanley with an “equal-weight” rating on UBS, said in a note yesterday.
The gross margin on business with international clients, which shows how much revenue the bank makes compared with assets under management, fell to 83 basis points in the third quarter from 102 basis points two years ago. A basis point is a hundredth of a percentage point.
“We consider the wealth management business to be facing significant challenges,” Dirk Hoffmann-Becking, a London-based analyst at Sanford C. Bernstein, who has an “underperform” rating on UBS, said in a note after earnings.
The following is a table of the 10 largest European banks by market value, with the percentage of buy ratings, their price-to-earnings ratios, and year-to-date stock performance, as of the close of trading on Nov. 4.
“The pressure is now mounting to demonstrate that the group is turning around, specifically with respect to the private banking franchise,” JPMorgan Chase & Co. analysts led by Kian Abouhossein said in a note yesterday. They have a “neutral” rating on UBS.
Shrinking Margins
UBS is not only seeing clients withdraw funds from its wealth management unit, the bank is also earning less on the remaining 1.68 trillion francs of assets under management, the earnings release showed.
“The dash-to-cash hit UBS’s margins harder than any other private banking division we cover,” van Steenis, a London-based analyst at Morgan Stanley with an “equal-weight” rating on UBS, said in a note yesterday.
The gross margin on business with international clients, which shows how much revenue the bank makes compared with assets under management, fell to 83 basis points in the third quarter from 102 basis points two years ago. A basis point is a hundredth of a percentage point.
“We consider the wealth management business to be facing significant challenges,” Dirk Hoffmann-Becking, a London-based analyst at Sanford C. Bernstein, who has an “underperform” rating on UBS, said in a note after earnings.
The following is a table of the 10 largest European banks by market value, with the percentage of buy ratings, their price-to-earnings ratios, and year-to-date stock performance, as of the close of trading on Nov. 4.
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