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US Brokerage Biz Keeps UBS Happy, Bob McCann Gives The Swiss A Billion Dollar Year

This article is more than 10 years old.

Something big happened at UBS Wealth Management Americas last year--billion dollar big. No, it's not another legal fine.

The Swiss bank's US brokerage business, headed up by former Merrill star Bob McCann, hit its $1 billion dollar annual pretax operating profit goal.

Why's that big news? Well, when McCann arrived at UBS in 2009 as CEO of Wealth Management Americas, UBS was losing advisors and client assets in droves. In a three-year span the broker head count dropped from 8,248 to 6,796, and $32 billion in client assets fled. The division mounted losses of nearly $900 million.

Not too long after arriving there McCann input some ambitious goals including the billion dollar pretax profit goal. Now, McCann and his team have met that goal and many others over the last four years in one of the industry's biggest turnaround efforts.

Read: Tale Of Two Bankers: Bob McCann, Sergio Ermotti Are Reinventing Wall Street

The Swiss bank reported earnings today, and McCann's unit put up another quarter of impressive numbers.

Record pretax profit of $254 million was up 18% from the prior quarter profit of $218 million and up 64% from $157 million in the same quarter last year. The unit also hit Record Revenue with $1.851 billion up 10% from $1.686 billion in the fourth quarter last year.

In the brokerage business, revenue per financial advisor is an important metric. It measures the average amount of revenue each financial advisor brings into the firm. The million dollar mark is highly coveted and this year UBS has been on top: Record Revenue per financial advisor of $1,042,000, up 8% from $967,000 last year. The full year 2013 was $1,001,000.

Net new money into the unit also continued to flow positive with $4.9 billion in the quarter making for a 14 straight quarters of inflows. This may have been the brokerage unit's weak spot in the quarter because while flows were positive they were down a whopping 44% from the same quarter last year when they hit $8.8 billion.

Still, UBS and its CEO Sergio Ermotti have lots to thank McCann for.

"We're pleased with the progress this business has made in recent years. And with invested assets of $1 trillion, pretax profits of $1 billion and FA productivity around $1 million, we're also excited about its future," Ermotti said in an analyst call this morning.

That's saying a lot considering just a few years ago there were talks about the Swiss bank selling the American brokerage business. It's come a long way.

In an interview back in December, Ermotti told Forbes, " “If we call ourselves the preeminent wealth management firm globally, then it would be impossible not to be a strong player in the biggest market in the world, the Americas."