UBS According to a consensus survey compiled by LSEG, the company reported net income attributable to shareholders of $3 billion in the first quarter, up 80% from the same period a year ago and beating analysts’ expectations of $2.8 billion.
The Swiss banking and wealth management giant’s common equity tier (CET) 1 capital ratio, a measure of a bank’s solvency, also rose, reaching 14.7% in the period, up from 14.4% in the previous quarter.
UBS, which reported first-quarter earnings on Wednesday, said it plans to buy back $3 billion in stock ahead of its next second-quarter earnings report, having repurchased $900 million in stock over three months. The bank also planned further share buybacks by the end of the year.
UBS shares rose more than 5% in early trading.
The Zurich-based company said the market remained “resilient” on the back of hopes for a durable solution to the ongoing Middle East conflict.
However, the bank acknowledged that risks remained “high” amid the rapidly changing circumstances and warned that net interest income in both its global wealth management business and personal and corporate banking business was expected to be “generally flat” in the second quarter.
Chief Executive Sergio Ermotti said UBS enjoyed a “very strong quarter” and showed resilience despite tensions from the U.S.-Iran war, adding that “the market suggests that a solution will be found.”
On CNBC’s “Squawk Box Europe” on Wednesday, Ermotti highlighted strong performance in the bank’s equity capital markets business and growth in its alternative assets division, noting that UBS is showing “good momentum across the board.”
“We’re seeing double-digit growth in profitability across all of our businesses,” Ermotti said in an interview with CNBC’s Carolyn Ross.
Underlying pre-tax profit for the quarter totaled $3.9 billion, up 54% from the year-ago period and beating analysts’ expectations of $3.2 billion.
U.B.S.
The group’s global wealth management business had net new assets of $37 billion at the end of the quarter, up 3.1% annually. Net new funds within the asset management division increased 2.7% year over year to more than $14 billion.
The Swiss government recently announced a plan aimed at preventing a repeat of a Credit Suisse-style bank failure, which would require UBS to hold about $20 billion in additional capital.
UBS continues to oppose sweeping regulatory reforms that would treat investments held by overseas subsidiaries separately from the group’s overall CET1 capital.
Meanwhile, Ermotti said the bank was “not seeing any major disruptions or problems” in the private credit sector. He added that UBS’s exposure here is “well diversified” and of “high quality”, representing about 0.5% of its balance sheet.
He said: “Some funds are under stress and others are gated according to vehicle terms.” “But other than that, we don’t see any major tensions. This is more of a liquidity issue than necessarily an obvious underlying performance issue.”
