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imageZURICH: Switzerland's biggest bank UBS reported Tuesday an 88 percent surge in first quarter profits, despite a strong franc, outstripping analysts' forecasts.

Profits soared to 1.9 billion Swiss francs (1.8 billion euros, $2 billion) from 1.05 billion Swiss francs in the previous year as its wealth management business raked in the biggest profit since the global economic crisis struck in 2008.

The results were far higher than the 1.1 billion Swiss francs forecast by analysts polled by Swiss financial agency AWS.

Operating revenues, equal to turnover, climbed 22 percent to 8.8 billion Swiss francs, the bank said in a statement.

The wealth management business posted an operating pre-tax profit of 951 million francs while the wealth management Americas division earned 253 million Swiss francs. The combined figure was the highest level since 2008.

Operating expenses meanwhile decreased, mainly reflecting lower general and administrative costs.

"I'm pleased with the strong quarter," said UBS chief executive Sergio Ernotti.

"The results again demonstrate the benefits of a strategy defined early and executed with a focus on long-term value creation."

UBS shares rose 4.78 percent to stand at 19.96 francs in afternoon trading.

The investment bank posted a pre-tax profit of 774 million Swiss francs against 425 million in the previous year, boosted by high market volatility which increased earnings from foreign exchange, rates and credit and global financing services.

UBS said it had taken measures to adapt its wealth management rates, taking into account negative interest rates in Switzerland and some other European countries.

"Excluding potential outflows associated with these initiatives, we expect our wealth management businesses will continue to deliver positive net new money in the second quarter," the bank said.

The bank said its retail and corporate division reported its best first quarter in five years, despite the introduction of negative interest rates in the home market.

"Results were operationally strong across all divisions despite tougher market and macro conditions, in particular foreign exchange volatility and negative interest rates," said Rainer Skierka, an analyst at J. Safra Sarasin.

"However, we would have expected some more clarity on litigation as these can become a drag on costs," he said.

In its quarterly report, the bank said ongoing discussions with the US Department of Justice were at "an advanced stage although no agreement has been reached ... on the form of a resolution" about manipulations on the foreign exchange market.

According to an informed source speaking last week on condition of anonymity, talks between UBS and some other banks with the department were at a critical stage and that and a deal could be reached in May with fines of up to $1 billion slapped on each.

Copyright AFP (Agence France-Presse), 2015

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