UBS AG, the Swiss lender shrinking its investment banking business, overtook Bank of America Corp. to top a ranking of the world’s biggest wealth managers compiled by Scorpio Partnership.
UBS boosted managed assets by 9.7 percent to $1.7 trillion in 2012 as it benefited from clients invested in emerging markets, the London-based research company said in a study of more than 200 firms published today. That outstripped a 5.9 percent gain to $1.67 trillion at Bank of America.
Global wealth management assets rose 8.7 percent to $18.5 trillion last year, helped by a 24 percent increase in net new money and market gains, according to Scorpio. The Standard and Poor’s 500 Index advanced 13 percent in 2012 year while the MSCI Emerging Markets Index climbed 15 percent.
“The sharp uptick is a turnaround for the private banking industry, which has struggled to attract convincing levels of new client assets since the financial crisis,” Scorpio said in an e-mailed statement. “Private banks have bounced back from their nadir of 2011.”
Wells Fargo & Co., another of the eight U.S.-based private banks on the list, was third, followed by Morgan Stanley.
The top 20 firms are outpacing rest of the industry as two-fifths of clients express a preference for a single wealth manager, compared with 14 percent who opt to use more than one bank, according to Scorpio. The top 20 managers grew assets almost 11 percent and oversee 76 percent of the total funds held by private banks, Scorpio said.
Still, the pace of earnings growth at wealth managers slowed last year amid rising operating costs, according to Scorpio. Profit climbed by an average of 9.8 percent in 2012, compared with 12.3 percent in 2011.
Spain’s Banco Santander SA returned to the top 20 ranking for the first time since 2010 after reporting a 66 percent increase in assets under management from buying out minority shareholders in Banco Espanol de Credito SA, a consumer bank which includes the Banif private banking arm.
Julius Baer Group Ltd. may climb the ranking this year after the Zurich-based bank agreed to buy Bank of America’s wealth management business outside the U.S. That could boost managed assets by as much as 72 billion Swiss francs ($74 billion), Julius Baer has said.
Credit Suisse agreed in March to buy Morgan Stanley’s wealth-management operations in the U.K., Italy and Dubai with about $13 billion of assets. HSBC Holdings Plc, Europe’s biggest bank by market capitalization, is considering selling parts of its Swiss private bank, three people with knowledge of the situation said on June 7.
More than half the wealth assets are booked in emerging markets, Scorpio said, after analyzing data from a selection of firms with a combined $1.1 trillion under management.
“The proportion has been increasing steadily as firms boost hiring in faster-growing emerging markets,” Sebastian Dovey, head of Scorpio, said in a telephone interview.
Net new money at UBS increased to 47 billion francs last year with “strong performances” in emerging markets and from ultra-wealthy clients with at least 50 million francs of investable assets, Chief Executive Officer Sergio Ermotti told investors on Feb. 5. The bank added a further 10.4 billion francs in the Asia-Pacific region and emerging markets in the first quarter of this year, according to a company report.
Private wealth in North America, western Europe and Japan grew 5.9 percent, compared with 12.9 percent in emerging markets in 2012, Boston Consulting Group said in a separate report in May.
The following is a table of the world’s biggest wealth managers based on end-2012 data from the Scorpio survey. The ranking may not be directly comparable with previous Scorpio reports as data may be adjusted each year. Some figures include assets managed for institutional investors including pension funds as companies’ reporting methods vary.
Rank Firm AuM AuM Rank 2012 ($bln) % Growth Change 1 UBS AG 1,705 9.7 +1 2 Bank of America Corp. 1,673.5 5.9 -1 3 Wells Fargo & Co. 1,400 7.7 -- 4 Morgan Stanley 1,308 7.3 -- 5 Credit Suisse Group AG 854.6 6.9 -- 6 Royal Bank of Canada 628.5 9.6 -- 7 HSBC Holdings Plc 398 5.6 -- 8 Deutsche Bank AG 387.3 11.1 -- 9 BNP Paribas SA 346.9 9.7 -- 10 Pictet & Cie.* 322.2 22.9 +1 11 JPMorgan Chase & Co. 318 9.3 -1 12 Citigroup Inc. 250 20.2 +1 13 Goldman Sachs Group Inc. 240 5.7 -1 14 ABN Amro Bank NV 212.7 12 -- 15 Barclays Plc 201.4 10.3 -- 16 Julius Baer Group Ltd. 200.8 12.3 -- 17 Northern Trust Corp. 197.7 13.8 -- 18 Bank of NY Mellon Corp. 179 6.6 -- 19 Lombard Odier & Cie.* 175.5 16 +1 20 Banco Santander SA 172.7 66.2 +3
*Pictet and Lombard Odier confirmed figures for March 31, 2013 and declined to give figures for Dec. 31, 2012, according to Scorpio.