Growing trade tensions have especially weighed on business in China, where investor worries have seen Chinese equities fall this year, the Swiss-based co-head of the world's largest wealth manager said in an interview.
"The U.S. is still going very strong, while the Chinese stock market is quite down this year if you look at the Shanghai index," Blessing said. "Investors in Asia see more negative impact of the trade debate and are more worried about it."
Falling markets tend to lead to less trading as clients become more risk averse, and also reduce the net interest income and fees the bank is able to generate as investment volumes and deposits go down.
"When markets are going down people tend to trade less – not more," Blessing said. "We are clearly closer to the end of the cycle than the beginning."
The bank believes the trade war debates will extend beyond U.S. mid-term elections in November, Blessing warned, so tensions and the global economic impact may yet rise.
The bank, however, takes a mid- to long-term view in determining investment allocations, as opposed to reacting to rapidly shifting discussions which have a short-term impact.
Blessing took over UBS's international wealth management business, offering private banking to millionaires and billionaires outside North America, in January, the same month it announced it would merge its two regional divisions into one global team.
He had led the global business jointly with his U.S.-based counterpart Tom Naratil since February.
Over the past three years, the bank's net new money growth of 2.1 to 2.2 percent has fallen at the lower end of the 2-4 percent target for 2018 to 2020 instated earlier this year.
Its non-U.S. wealth management unit had previously targeted growth of 3-5 percent, while its Wealth Management Americas unit had targeted 2-4 percent growth.
It will provide an investor update in London on Oct. 25.
(Reporting by Brenna Hughes Neghaiwi and Angelika Gruber; Editing by Michael Shields)
By Brenna Hughes Neghaiwi and Angelika Gruber
