UBS 2Q Net Profit Beats Estimates, aided by Wealth Management – Update
By Mauro Orru
UBS Group AG posted second quarter net profit well above analyst estimates against a backdrop of strong momentum in global wealth management, personal and corporate banking and asset management.
The Swiss bank said Tuesday that net profit climbed to $ 2.01 billion from $ 1.23 billion a year earlier, above analysts’ estimates of $ 1.34 billion, according to a consensus provided by the Society.
Pre-tax profit from UBS’s global wealth management business grew in all regions, while recurring net commissions increased by 30% thanks to an increase in assets generating commissions on average.
UBS recorded $ 80 million in credit losses against spending of $ 272 million a year earlier, when banks braced for potentially huge losses on consumer and business loans due to the coronavirus pandemic . Analysts expected spending of $ 69 million for the quarter.
Operating profit for the quarter was $ 8.98 billion, up from $ 7.40 billion last year and ahead of analysts’ estimates of $ 8.25 billion.
In the Individuals and Businesses division, operating income increased by 31% thanks to the write-backs of bad debts and a capital gain on property disposals.
In asset management, operating income increased 27% due to higher net management fees, as well as a gain of $ 37 million on the sale of a minority stake in Clearstream Fund Center to Deutsche Boerse AG.
UBS’s investment bank also performed well in the quarter, with operating income up 9%. Global banking revenues grew 68% driven by gains in advisory and capital market revenues.
UBS expects third quarter earnings to be influenced by seasonal factors, citing lower client activity levels than second quarter 2021. It also expects rising asset prices to have a positive effect on recurring commission income in its asset collection activities.
Write to Mauro Orru at [email protected]; @ MauroOrru94