UBS: Q2 net income better-than-expected

(CercleFinance.com) - On Wednesday, UBS reported better-than-expected Q2 results, thanks to its dynamic investment banking division and its cost-cutting efforts.


The Swiss bank's net profit for the period April to June came to $1.1bn, over double the consensus of around $530m.

Its investment banking division exceeded expectations in particular, reporting pre-tax profit of $477m.

The wealth management business, the main contributor to earnings, posted pre-tax profits of $871m, based on net new money of $27bn in the quarter.

UBS points out that it generated an additional $900m in savings in Q2, representing a total of some $6bn on an annualised basis in relation to the combined group's financial year 2022.

UBS now expects to achieve a gross cost reduction of around $7bn by end-2024, or some 55% of its overall target of $13bn by end-2026.

Our first-half results testify to the major progress we have made since the closing of the Credit Suisse acquisition, UBS CEO Sergio Ermotti said.

UBS also strengthened its CET 1 capital ratio to 14.9% at the end of June, compared with 14.8% at the end of March.

Although the group looks forward to Q3 with "positive sentiment", it believes that the economic outlook is likely to be clouded by geopolitical factors, as well as the approaching US elections.

For the foreseeable future, we believe that these uncertainties will persist, probably resulting in higher market volatility than in the first half of the year, it says.

In early trading, the share price was up almost 2%, posting the biggest rise on the Zurich Stock Exchange's SMI index and outperforming the European Banks index (+0.3%).


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