ZURICH: UBS’s first-quarter net profit rose 17% on Tuesday to its best since 2007 on the back of strong trading, upending expectations for a fall amidst uncertainties over the war in Ukraine.
Net profit for the March quarter of $2.136 billion outpaced average expectations for $1.79 billion in a poll of 21 analysts compiled by the Swiss bank.
One of the first two major European banks to report results alongside HSBC, UBS’s earnings provided a sharp contrast to the profit declines US peers reported this month.
“In the first quarter, we remained focused on executing our strategy, providing stability for our clients and managing risk,” Chief Executive Ralph Hamers said in a statement. “Our strong results today speak to our ability to accomplish our objectives regardless of the backdrop.”
The results show Switzerland’s biggest bank is on track to meet enhanced profit goals outlined by Hamers in February and have widened the gulf between it and smaller cross-town rival Credit Suisse, which is struggling under the weight of a string of scandals.
Credit Suisse last week flagged an anticipated first-quarter loss after increasing legal provisions, seeing business activity slow and taking a hit from the fallout of Russia’s invasion of Ukraine.
Wall Street banks have come under pressure amid a slump in dealmaking globally, but volatility fuelled by concerns around interest rate hikes and the economic fallout of the Ukraine war have helped trading desks smash expectations.
UBS’s investment banking saw pre-tax profit rise 126% as a 59% rise in global markets trading revenue helped offset a 30% decline in capital markets and advisory revenue as dealmaking and IPOs slowed.
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During the prior-year period, investment banking results were hampered by a $774 million loss on the collapse of US-based client Archegos.
Excluding that, global markets revenue would have been up 4%, UBS said.
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