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UBS Group AG delivered better-than-expected profits in the second quarter thanks to strong client activity in buoyant global markets.
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On Tuesday, Switzerland’s largest bank said its net profit jumped to $ 2 billion from $ 1.23 billion a year earlier, beating analysts’ expectations of $ 1.34 billion. He said wealthy clients negotiated more, increasing transaction revenue by 16% from the previous year, and added that recurring charges were 30% higher on their existing transactions and products.
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At UBS investment bank, advice on mergers and acquisitions and other corporate transactions pushed up global banking income by 68%, helping to offset a 14% drop in trading income on the market.
Troy, Michigan, USA – June 25, 2012: UBS in Troy, Michigan. Originally founded in 1854 in Switzerland, UBS is a global financial services company with a worldwide presence. (iStock)
UBS said market revenues would have been stable, but an additional $ 87 million was needed in the quarter following the failure of family office Archegos Capital Management at the end of March. UBS was one of half a dozen banks that lent Archegos to take large, concentrated positions in equities. The Swiss bank said in April it lost $ 861 million on exiting transactions, with most of it being booked in the first quarter.
Managing Director Ralph Hamers said on Tuesday high net worth clients were investing more with the bank in private markets and separately managed accounts, adding that they also released cash as a buffer against unforeseen events by refinancing assets and borrowing. Near the bank.
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He said the momentum is on UBS’s side and its strategic choices are paying off. The bank refocused on wealth management ten years ago and reduced its investment banking. It has been less in the limelight than its smaller national rival, Credit Suisse Group AG, which has lost more than $ 5 billion in the Archegos affair this year.
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