Prime Highlights :
- UBS posted first-quarter net profit of $3 billion, beating estimates and rising 80% year-on-year.
- The bank plans to continue share buybacks and remains financially strong with a 14.7% CET1 ratio.
Key Facts :
- UBS is Switzerland’s largest bank and a major global wealth management company.
- Switzerland’s proposed reforms could require UBS to hold about $20 billion in extra capital.
Background :
According to UBS, its net income for the first quarter increased to US$3 billion from US$1.65 billion, up by 80 % compared to the same period last year. It exceeded expectations of analysts who estimated earnings to be US$2.5 billion. Besides, the bank’s CET1 ratio grew from 14.4 % to 14.7 % in the previous quarter.
The Zurich-based lender said it remains on track to complete $3 billion in share buybacks before its second-quarter earnings report. UBS repurchased $900 million worth of shares during the quarter and plans further buybacks later this year.
The bank said market conditions stayed resilient during the quarter as investors expected a lasting solution to the Middle East conflict. However, UBS warned that risks remain elevated because of changing global conditions. It expects second-quarter net interest income across wealth management and personal and corporate banking to remain broadly flat.
Chief Executive Sergio Ermotti said the bank delivered a very strong quarter and showed resilience despite geopolitical tensions linked to the U.S.-Iran conflict. He added that markets appeared to believe a resolution would be reached.
UBS reported underlying profit before tax of $3.9 billion, up 54% year-on-year and above analyst estimates. The group’s global wealth management division attracted $37 billion in net new assets, while its asset management business recorded more than $14 billion in net new money.
Separately, Switzerland’s government recently proposed tougher capital rules to prevent another banking crisis similar to Credit Suisse. The measures could require UBS to hold around $20 billion in additional capital. UBS has opposed parts of the plan, especially proposals related to capital treatment of foreign subsidiaries.
The bank also said it sees no major stress in private credit markets and described its exposure as diversified and limited.