UBS’s Global Wealth Management Americas business continued losing advisors in the latest quarter as the global unit overall saw assets shrink and profit drop.

The Americas unit ended June with 6,139 advisors, according to the firm’s second-quarter earnings report, down from the 6,199 advisors it had at the end of March.

The number of advisors in the global wealth management business overall fell from 9,300 at the end of March to 9,224 by the end of June, which was also 3% lower year-over-year, UBS says.

The Americas segment also saw a negative $3.5 billion in net new fee-generating assets during the latest quarter, which resulted “in a negative annualized net new fee-generating asset growth rate of 1.6%,” according to the firm.

Meanwhile, the wealth management unit overall saw just $400 million in net new fee-generating assets in the latest quarter, compared to $19.4 billion added in the first quarter this year and $25.0 billion added in the second quarter of 2021, the company says.

That led to fee-generating assets in the unit overall shrinking to $1.24 trillion by the of June, which was 12% lower than the unit had at the end of March as well as at the end of June 2021, according to the report.

Invested assets in the global wealth management business stood at $2.81 trillion at the end of June, which was 11% down from the end of March and 13% lower year-over-year, UBS says.

Net interest income and other net income from financial instruments at fair value through profit or loss in the global wealth management unit rose to $1.55 billion in the latest quarter, which was $227 million higher year-over-year, “largely reflecting higher net interest income, mainly due to an increase in deposit revenues, which was driven by both higher deposit margins, as a result of rising interest rates, and increased deposit volumes,” according to the firm.

But the company added that net brokerage fees for the firm overall dropped significantly in large part because of “lower levels of client activity in Global Wealth Management, particularly in the Americas and Asia Pacific.”

The global wealth unit also saw $793 million in transaction-based income in the latest quarter, which was 17% lower year-over-year, according to the report. Recurring net fee income fell 6% year-over-year, to $2.61 billion, the company says.

As a result, total revenues in the second quarter this year were $4.68 billion, which was 5% lower than in the prior quarter and 2% lower year-over-year, according to the report.

In the Americas’ unit, however, total revenues were $2.64 billion, which was 1% higher year-over-year, “mostly driven by higher net interest income,” the company said.

Operating expenses in the unit overall, meanwhile, inched down to $3.52 billion in the latest quarter, which was 2% lower than in the first quarter but also 1% higher year-over-year, according to the firm.

The Americas unit nonetheless saw profit before tax drop by $108 million year-over-year, or around 21%, to $397 million, “mainly driven by an increase in provisions for litigation, regulatory and similar matters,” UBS said in the report.

Operating profit in the global wealth management unit overall in the second quarter this year was therefore down sharply: at $1.16 billion, it was 12% lower than in the prior quarter and 11% lower year-over-year, according to the report.

The bank also revealed that it’s one of several financial institutions being investigated by the Securities and Exchange Commission and the Commodity Futures Trading Commission in regard to its employees’ use of unapproved communication channels.

“The SEC and CFTC are conducting investigations of UBS and other financial institutions regarding compliance with records preservation requirements relating to business communications sent over unapproved electronic messaging channels. UBS is cooperating with the investigations,” the company said in the report.

So far, Bank of America and Morgan Stanley have set aside around $200 million each to settle the regulators’ probe into the use of unapproved devices at their firms, while Citigroup has indicated that it has earmarked a similar figure.

That was also the amount that JPMorgan agreed to pay in December in its settlement with the two regulators over the firm’s failures to monitor employees’ communications.

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