UBS profits grow but investment bank, wealth management fall
UBS on Tuesday reported its highest second quarter net profit since 2010 even as its investment bank and wealth management divisions suffered declines.
The Swiss bank recorded a net profit of $1.4bn for the second quarter, up 1% from the same period last year and ahead of analyst expectations of a 25% slide in a poll compiled by the bank.
The personal & corporate banking division saw its adjusted profit before tax increase by 11% to $397m as transaction-based income climbed and credit loss expenses were reduced, while the asset management division's profits rose by 10% to $135m as net management fees increased.
However, UBS' investment bank declined for the third consecutive quarter as it recorded a 23% drop in adjusted profit before tax to $440m after equities revenue fell by 9% and foreign exchange, rates and credit edged 7% lower.
Meanwhile, the wealth management division's adjusted pretax profit was down 12% at $886m as recurring net fee income was down compared to last year despite a quarterly recovery.
UBS cited "challenging" markets along with low volatility and client activity for the divisions' poor performances, adding that more general risks remain from political uncertainties and geopolitical tensions.