UBS beat analyst forecasts with a 19 per cent rise in quarterly profits, thanks to strong performance in its trading division.
The world’s biggest wealth manager announced $2.7bn of net profit for the first quarter on Tuesday, comfortably ahead of the $2.4bn predicted by analysts.
Profits at the Swiss lender’s investment bank more than doubled compared with the first quarter last year, when it lost $774mn on the collapse of family office Archegos.
The bank benefited in the first quarter of 2022 from a 59 per cent increase in revenues in its trading division owing to strong performance in equity derivatives, interest rates and foreign exchange.
But UBS’s wealth business was hit by a 7 per cent decline in revenues compared with the same period last year, with the group saying transaction-based income fell 19 per cent as clients, particularly in Asia, made fewer transactions.
“The first quarter was dominated by extraordinary geopolitical and macro events,” said Ralph Hamers, chief executive. “Against this backdrop we remained focused on executing our strategic plans, serving our clients and managing risk.”
Analysts at Citigroup expected UBS to be the best-performing European investment bank this reporting season, with the lender benefiting from higher revenues in its global markets division, which is focused on equities and foreign exchange.
In the days following Russia’s invasion of Ukraine, UBS revealed it had $10mn in loans outstanding to clients hit by western sanctions. It said it also had about $200mn of exposure to Russian assets used as collateral in Lombard lending and $634mn of direct risk exposure to the country.
UBS on Tuesday said it had reduced its direct risk exposure to Russia by a third to about $400mn.
It added that EU and Swiss rules that prohibit accepting deposits of more than €100,000 from Russians not entitled to live in the European Economic Area affected 0.7 per cent of assets in its wealth management division.
The lender’s share price is flat this year after recovering from a 28 per cent fall during the early days of the Ukraine war.
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