Inside Wealth

UBS, Morgan Stanley private bank assets swell past $2 trillion: Report

UBS and Morgan Stanley were the world's biggest wealth managers in 2014, with assets under management swelling at each to top $2 trillion, according to new research.

UBS posted year-on-year growth of 15 percent in its assets under management to become the largest private bank in the world by this measure, with $2.03 trillion, according to a report on Wednesday from Scorpio Partnership, a wealth management research company owned by Aon Hewitt. Morgan Stanley was not far behind, with $2.02 trillion.

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Overall Scorpio Partnership, found that the global private banking industry managed over $20 trillion in assets for wealthy investors, based on its study of 200 private banks. Private banks focus on ultra-high-net-worth-investors, with clients usually required to have a minimum of $1 million in investable assets, with thresholds varying from bank to bank.

Across the industry, assets grew on average by around 3 percent—sharply down from the 14 percent average growth rate posted in 2013, according to Scorpio Partnership.

Operating profits were up by 3 percent in 2014, in line with growth seen the previous year.

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"This is a complex moment in history for our industry," said managing partner of Scorpio, Sebastien Dovey, because despite financial market volatility, most of the major institutions saw their client volumes grow.

"Costs versus income" is a key issue for the private banking sector, Dovey added, saying that players had not responded quickly enough, resulting in markedly slowing growth.

The wealth management industry has seen a run of consolidation and mergers, most recently with the Royal Bank of Scotland's sale of its Coutts international operation to family-owned Swiss private bank, Union Bancaire, in March for an undisclosed sum.

North American and Swiss banks went head to head for a spot in the top 5 rankings, with Bank of America Merrill Lynch in at number three, Credit Suisse at number four, followed by Royal Bank of Canada in fifth place.

As a whole, the global asset management industry grew to $74 trillion in 2014, the highest figure on record, according to a separate survey by Boston Consulting Group, published on Tuesday. Profits for asset managers also hit pre-crisis peak of $102 billion, the consultancy said.

Top 10 private banks worldwide by assets under management ($ in billions)

  1. UBS: $2,035
  2. Morgan Stanley: $2,025
  3. Bank of America Merrill Lynch: $1,984
  4. Credit Suisse: $883
  5. Royal Bank of Canada: $704
  6. Citi: $550
  7. JP Morgan: $428
  8. BNP Paribas: $370
  9. HSBC: $365
  10. Goldman Sachs: $363

Source: Scorpio Partnership