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UBS Group AG (UBS) shares were marked sharply lower in Zurich trading Tuesday after Switzerland's biggest investment bank posted weaker-than-expected fourth quarter earnings thanks to a slowdown in its key wealth management business.

UBS reported nearly $8 billion in net client outflows from its wealth management division, a figure that echoed record withdraws from investment funds in the United States and elsewhere, over the final three months of last year. The exodus helped push net income 2% higher from the same period last year to $862 million but well shy of the bank's own forecast of $985 million. Wealth management profits fell 22% to $769 million, the bank said.

"In wealth management, of course, when I look at our results, they are not up to our expectations or ambitions, but when you look region-by-region in Asia you still see 5% year-on-year growth despite the risk-averse sentiment from clients," CEO Sergio Ermotti told Bloomberg television. "If I look at the U.S., we had net outflows, but if I look at invested assets, we have been performing better than our peers."

Overall, it's reflective of the sentiment we saw in Q4: less leverage and more people going into cash," he added.

UBS shares were marked 4.1% lower by mid-afternoon in Zurich and changing hands at Sfr12.87 each, a move that extends their three-month decline to around 7%.

Bank of America Merrill Lynch noted earlier this month that equity fund outflows hit a record $84 billion over the final six weeks of last year as the S&P 500 teetered on the verge of bear market territory amid a two month long selloff that started in October.

Data from Lipper, and investment fund tracking group, noted that equity mutual funds experienced negative net flows for 28 consecutive weeks ending in December, while the month as a whole recorded the biggest exit of cash across all funds since records began in 1992.

UBS cautioned, however, that a "lack of progress in resolving geopolitical tensions, rising protectionism and trade disputes along with increased volatility, which affected investor sentiment and confidence in the second half of the year and particularly in the fourth quarter of 2018, would affect client activity in the first quarter of 2019."