The private banking sector is showing improving signs of life as new money flowing into the sector sees a significant rebound, with UBS once again taking the top spot in a global poll of wealth managers.
Net new money increased by 23.7 percent on average over the last financial year, Scorpio Partnership's annual private banking benchmark released on Wednesday showed. This sharp uptick is a distinct turnaround for the industry with the same indicator posting a 27.9 percent decline for 2011.
The benchmark - which tracks 209 financial firms - found that a "Champions League" of 20 operators had experienced a 10.9 percent growth in asset under management since 2011, compared with an average of 8.7 percent. Switzerland's UBS reclaimed the top position with $1,705 billion of assets under management, edging out Bank of America in second and Wells Fargo in third.
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"The global insight of thousands of consumers undertaken by us this year shows the strength of the brands in winning new assets, the strength of client experience in keeping that business and, most recently, the increased desire to streamline the number of financial relationships a client has. This all bodes well for firms tuned into customer need. This is raising the bar on competition," Sebastian Dovey, managing partner at Scorpio Partnership said.
Confirmation of first place will be welcome news for UBS as the bank announced in October that it would massively reduce its investment bank and wind down its FICC (Fixed Income Clearing Corporation) business to reduce risk-weighted assets and re-balance the focus on its wealth management business. The bank also said last year that it aimed to cut 10,000 jobs and cut 5.4 billion Swiss francs in costs by 2015.
The Swiss bank was fined a record $1.5 billion in December for the manipulation of Libor interest rates, which came after a string of scandals including a $2.3 billion loss after rogue trading at an equity derivatives desk in London.
The new wealth management report suggests signs of a return of client confidence to private banks, but where revenues may be improving, pre-tax profit has not followed suit. Profit growth slowed to 5.3 percent for 2012, compared to 12.3 percent in 2011, according to the research.
"Cost management is a key factor here. The wealth management industry's operating costs are continuing to creep up. The industry needs to focus on working out its efficiency points and optimizing them," the report said.
"The analysis of the data shows there are still signs of weakness in the model for many operators."
—By CNBC.com's Matt Clinch. Follow him on Twitter @mattclinch81.