UBS reported a rise in second-quarter profits on Wednesday, as CEO Sergio Ermotti warned that geopolitical volatility could create new headwinds in the future.
Net profit attributable to shareholders of the Swiss banking and wealth management giant amounted to $2.8 billion over three months, in line with analysts’ forecasts in a consensus poll by LSEG.
Pre-tax profits reached $3.6 billion over the three-month period, up 64% year-on-year.
Speaking to CNBC’s “Squawk Box Europe,” Ermotti highlighted strong business momentum in the second quarter, with a “very good” pipeline in investment banking, M&A and capital markets, and positive results in leveraged capital markets, debt capital markets and equities.
He also flagged a “dynamic” IPO market, with UBS involved in a number of deals, including SpaceX’s historic debut. The bank also unveiled a new $3 billion share buyback plan, starting with the repurchase of $1 billion in shares over the next three months.
UBS shares were up 2.5% in morning trading.
Ermotti acknowledged that geopolitical fissures remain a pressure point for markets, but ignored the potential growing market fatigue around the AI narrative.
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UBS.
“Obviously, the current volatility that we’re seeing on the geopolitical front could create some sort of temporary headwind,” he told CNBC. Caroline Roth. “But the momentum is good – we are well placed to reap the benefits.”
Regarding AI, Ermotti said that given the pace and scale of the increase in market capitalizations and concentration over the past three to four months, a correction was to be expected.
“It’s completely healthy to see this. We advise our clients in this context to always really diversify,” Ermotti said.
He said AI and its supporting infrastructure would remain an “important factor” in markets, adding that the economic impact and benefits of AI would spill over into many other sectors beyond the current focus.
“This is a huge opportunity we can offer our clients to diversify and invest for the future.”