In spite of the tax probe against UBS AG (UBS: 14.47 +0.07 +0.49%) that threatened the company’s age-old secrecy laws, the company ranked #2 as global wealth managers in 2009 as per the Global Private Banking study from Scorpio Partnership. The company came just behind Bank of America Corporation (BAC: 15.11 +0.25 +1.68%).According to the report that was published in Reuters, Bank of America with assets under management (AUM) of $1,741 billion and 10.5% share of private banking assets as of year end 2009 topped the list. Next was UBS with AUM of $1,594 billion and 9.7% share of private banking assets.
Morgan Stanley (MS: 24.70 +0.50 +2.07%) ranked #3 with AUM of $1,508 billion while Wells Fargo & Company (WFC: 27.00 +0.36 +1.35%) took fourth place with AUM of $1,218 billion. Credit Suisse Group (CS: 42.33 +0.04 +0.09%) with AUM of $775 billion came in fifth while JPMorgan Chase & Co. (JPM: 38.85 +0.69 +1.81%) with AUM of $636 billion ranked sixth.
UBS managed the second spot in spite of a tax investigation by the U.S. Authorities questioning the company’s privacy laws. The company agreed to share details of 4,500 U.S. clients of UBS who were alleged to have evaded taxes. The details of these clients are to be handed over to the U.S. Internal Revenue Service by August this year.
Swiss banks have traditionally enjoyed large foreign deposit inflows as a result of the country’s tax system, which emphasizes extreme secrecy. However, following concerns over the dilution of its secrecy, UBS is experiencing large fund outflows as worried clients seek a safer refuge.Additionally, the global economic turmoil has severely hurt the Swiss banking major’s balance sheet, when the subprime crisis led to record losses. The company faced significant credit write-downs. Nevertheless, in an effort to rebound, the company has taken a number of restructuring initiatives which we believe should support results.
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