UBS beats expectations but investment bank profits plunge 64 per cent
Swiss banking giant UBS beat expectations but reported a 64 per cent profit fall in its investment bank in a “challenging" quarter.
Chief executive Sergio Ermotti had set the bar low after warning of “one of the worst first-quarter environments in history,” earlier this month.
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Overall net profit dropped 27 per cent to $1.14bn, beating expectations of $902m.
Profits at the Swiss lender’s investment banking arm plummeted 64 per cent to $221m compared with the same period last year.
UBS said blamed challenging market conditions and lower levels of activity for a 22 per cent fall in equities revenue.
Ermotti previously said investment banking revenues would drop by about a third, but results improved on his estimations, falling 27 per cent.
The bank’s flagship wealth management business saw profits fall 21 per cent despite $22bn of net new assets from wealthy clients, including a “notably strong” $16.3bn from clients in Asia.
Chief executive Sergio Ermotti said: “The first quarter of 2019 was characterised by challenging market conditions, which improved towards the end of the quarter and into April.”
In contrast arch rival Credit Suisse posted an unexpectedly strong eight per cent profit rise to Sfr283m (£569m) – its highest quarterly profit since the third quarter of 2015.
Its global markets division, which has struggled in recent years, reported profits of Sfr283m, bouncing back from losses of Sfr289m in the second half of 2018.
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UBS has endured a difficult 2019 so far after it was fined €4.5bn (£3.9bn) by a French court after being found guilty of laundering the proceeds of tax evasion, a ruling it has since appealed.
But Ermotti said the second half of the year would see revenues improve.
UBS beats expectations but investment bank profits plunge 64 per cent
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