UBS generated net income attributable to shareholders of $3 billion for the first quarter, up 80% year-over-year and exceeding the $2.8 billion estimated by analysts, according to a consensus poll by LSEG.
The Swiss banking and asset management giant’s core capital ratio (CET) 1, an indicator of a bank’s solvency, also increased, reaching 14.7% in the period, up from 14.4% in the previous quarter.
In reporting its first-quarter results on Wednesday, UBS said it remains on track to repurchase $3 billion in shares ahead of its next second-quarter earnings report, after repurchasing $900 million in shares during the three-month period.. The bank also announced its intention to carry out further share buybacks by the end of the year.
UBS shares jumped more than 5% in early trading.
The Zurich-based company said markets remained “resilient” amid hopes for a lasting resolution to the ongoing conflict in the Middle East.
But recognizing that risks remain “high” in a rapidly changing environment, the bank warned that second-quarter net interest income, both in its global wealth management business and in its personal and commercial banking businesses, is expected to be “broadly stable.”
CEO Sergio Ermotti said UBS had a “very good quarter”, demonstrating its resilience despite tensions over the US-Iran war, adding that “markets are suggesting a solution will be found”.
Speaking on CNBC’s “Squawk Box Europe” on Wednesday, Ermotti highlighted the strong performance of the bank’s capital markets business, as well as growth in its alternative assets unit, noting that UBS saw “good momentum across the board.”
“We saw all of our businesses generate double-digit profitability growth,” Ermotti told CNBC’s Carolin Roth in an interview.
Underlying pre-tax profits totaled $3.9 billion for the quarter, up 54% year-over-year and beating analyst expectations of $3.2 billion.
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UBS.
The group’s global wealth management business recorded net new assets of $37 billion at the end of the quarter, an annualized increase of 3.1%. Net new capital within its asset management division exceeded $14 billion, up 2.7% year-over-year.
The Swiss government recently unveiled plans to prevent another Credit Suisse-style banking collapse, which would force UBS to hold about $20 billion in additional capital.
UBS has continued to oppose a radical regulatory overhaul, which would see investments held by its foreign subsidiaries treated separately from its entire group-wide CET1 capital.
At the same time, Ermotti said the bank “does not see any major disruptions or problems” in the private credit sector. He added that UBS’s exposure in this area is “well diversified” and “good quality”, amounting to around 0.5% of its balance sheet.
“A few funds are under pressure, and others have been blocked based on the terms and conditions of the vehicle,” he said. “But other than that, we’re not seeing any major stresses. It’s more of a liquidity issue than necessarily an obvious underlying performance issue.”
