UBS blows past analysts Q2 estimates, announces $600m share buyback

The Swiss investment bank posted net income of $2.01bn, easily surpassing analysts' estimates for $1.32bn of profit.

"Momentum is on our side and our strategic choices and

initiatives are paying off. And we are eager to make the

most of the future," chief executive officer Ralph Hamers said in a statement.

Invested assets in private banking and asset management grew by 4% to approximately $4.5trn for a 30% surge in recurring fee income and a 16% jump in transaction-based earnings.

Clients' invested assets include net flows related to mandates, investment funds with recurring fees, hedge funds and private markets investments, combined with dividend

and interest payments into mandates, less fees paid to UBS by clients.

UBS predicted that activity in wealth management was set to moderate over the third quarter, even if partly due to seasonal factors.

Yet mergers and acquisitions activity was expected to remain high over the same period.

Management did nevertheless caution regarding "continued uncertainty about the environment and economic recovery."

On the flip side, UBS managed to beat its 2020-2022 targets for group returs and on its cost-to-income ratio.

Hence, the investment bank said that it would provide a strategic update in the last quarter of 2021, including new financial targets.

The lender achieved a 19.3% return on its common equity tier one capital over the three months to June and a return on risk-weighted assets of 12.2%.

It ended the quarter with a CET1 ratio of 14.5% (Guidance: 13.0%).

Its cost-to-income ratio meanwhile came in at 71.8%, versus 73.8% for the prior quarter (Guidance: 75-78.0%).

UBS also announced its intention to buy back $600m-worth of its own shares in the third quarter.

Shares of UBS were trading 4.19% higher to 13.91 Swiss francs as of 1002 BST on the back of its latest earnings.