UBS reports a drop of nearly half in its 2016 net profits - but points to a turnaround in Q4 and offers a bullish view of how a Donald Trump-inspired rally will revive its wealth management business. Ciara Lee reports.
A 47 percent fall in full-year net profit - but it's a glass half full approach for UBS. The Swiss lender hopes a Donald Trump-inspired rally in the U.S. will help boost earnings at its struggling wealth management business. The bank says growing investor confidence in the U.S. towards the end of 2016 is a sign clients could be ready to get back into the market. In what could be good news for the sector. SOUNDBITE (English) JEREMY STRETCH, HEAD OF FX STRATEGY AT CIBC WORLD MARKETS, SAYING: "Clearly if we are having moves up in long term interest rates, then that has important beneficial aspects to balance sheets and lending relationships. So I think that is obviously better news. And I think we have seen that reflected in terms of some of the bank performance, over the course of the last six months or so." UBS saw its 2016 net profit fall to 3.3 billion Swiss francs from 6.2 billion in 2015. That beat analyst forecasts, in part thanks to better than expected results in its equities business. But profit from UBS's core wealth management business is under pressure. Excluding North America, transaction-based business was the lowest on record in Q4. Its Wealth Management Americas division saw $1.3 billion in outflows but still posted a record adjusted pre-tax profit. Shares in the bank were down more than 2 percent in early trading, lagging the European banking sector index.