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UBS wealth arm assets near $2 trillion 'milestone'

Jenny Cosgrave
Gianluca Colla | Bloomberg | Getty Images

Swiss bank UBS (Swiss Exchange: UBSN-CH) saw 15.4 percent growth in its wealth management business for 2013, firmly securing its position as world leader in the sector, with close to $2 trillion of assets under management.

If growth continues at its current rate, the bank - which currently runs $1.96 trillion - will become the first wealth manager to hit the $2 trillion "milestone", according to wealth data firm Scorpio Partnership. This would mark a "transition in the scale of global wealth management", Scorpio added.

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It comes after the bank said it was focussing on its wealth management and private banking businesses - while trimming its investment bank - and beat expectations with first-quarter net profit of 1.054 billion Swiss francs ($1.2 billion).

The world's top 25 private banks by assets experienced average growth of 11.3 percent in 2013. Together, the firms manage over 78 percent of the wealth management industry's assets, up 1 percent from last year, Scorpio said.

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Bank of America Merrill Lynch (NYSE:BAC - News) (BofA ML) maintained second position on the Global Private Banking Benchmark, as assets under management (AUM) grew 12.5 percent last year to $1.86 trillion. Morgan Stanley (NYSE:MS - News) is ranked third, with 17.5 percent growth in AUM of to $1.45 trillion.

BofA ML's decision to sell its international wealth management arm in 2012 to Julius Baer (Swiss Exchange: BAER-CH), which helped to boost the Swiss private bank's assets by 40 percent, is just one example of U.S. firms choosing to focus on their home market, Scorpio said.

BNP Paribas (Euronext Paris: BNP-FR) and Deutsche Bank (XETRA:DBK-DE) both crept up one position on the benchmark, while HSBC (London Stock Exchange: HSBA-GB) slipped from sixth to eight place, due to its strategy to pull out of non-core markets.

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"This year's results highlight major structural changes taking place in global wealth management," Seb Dovey, managing partner of Scorpio partnership, said in a statement. "The findings demonstrate that the international wealth management secotr is acclimatising to a 'new normal'. Strong growth figures are commonplace, but so too are rising costs as the recovery is accompanied by increased regulation."

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