UBS says Asia's wealthy trade less, cut debt as politics shift

ZURICH (Reuters) – Wealthy Asian investors are trading less, worried that trade tensions are tilting the global balance of power, Martin Blessing, co-head of wealth management at UBS (UBSG.S), said.

FILE PHOTO: The logo of Swiss bank UBS is seen at a branch office in Basel, Switzerland March 29, 2017. Picture taken on March 29, 2017. REUTERS/Arnd Wiegmann/File Photo

“I think they would share the conclusion that it is not only about tariffs, it is more about political balance. That might take longer to resolve. People who had taken leverage to invest into the market … have retrenched a bit,” he told Reuters.

As geopolitical jitters and trade tensions have put pressure on its main business, Switzerland’s biggest bank, which is also the world’s largest wealth manager, is turning to ultra-rich Americans for growth.

While U.S. clients have begun to take more note of ongoing trade wars, their mood remains more positive, Blessing said.

UBS has seen a rise in their investments. Democrats took control of the U.S. congressional House of Representatives and made gains in state governor races in November.

“Their willingness to invest has gone up. Their outlook on the capital market has become even more positive,” he said.

Blessing expects profitability in the wealth management business to remain good, despite margin pressure.

“Competitive pressure will continue, profit margins are coming down, and then you either have to find different business opportunities or you have to grow volumes to make up for the revenues,” the German, former Commerzbank (CBKG.DE) CEO said.

Although margins are higher on business for so-called

Keep reading this article on Reuters Personal Finance.