UBS Taiwan yesterday said that its wealth management business was not affected by the COVID-19 pandemic in the first quarter, but it might face more serious challenges this quarter.
Its local business fared well because clients were interested in taking advantage of the volatility in the equity market, UBS wealth management in Taiwan head Dennis Chen (陳允懋) told a teleconference.
However, since the pandemic spread to the US and Europe in late March, investors have found it more difficult to make economic projections and choose targets, which could weaken the money management business this quarter, Chen said.
Business shrank slightly last month, which might continue until the end of next month, he said, adding that his prediction corresponds with the parent company’s forecast that the pandemic would affect the wealth management business.
Clients have become more conservative as it is difficult to forecast how European markets would evolve, while it is unlikely that China would be able to return to its pre-crisis level growth in the short term, he said.
Some clients have opted to invest in foreign currencies and fixed income to limit uncertainties, he said.
UBS expects the momentum to recover in the second half of this year, if the pandemic eases, he said.
While UBS Group AG provisioned US$268 million for bad loans during the first quarter, the local unit did not have to, Chen said, adding that its credit portfolio remains solid.
The company has split its operation with about 40 employees relocated to an emergency-use office in Taoyuan’s Longtan District (龍潭) to prevent possible internal contagion, while some staff are working from home, he said.
It has canceled all physical meetings with clients, and agents have to reach their clients online, he said.
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