UBS quarterly income bounce by virtually a fifth

First-quarter income at UBS jumped by virtually a fifth, beating analysts’ expectations because of sturdy efficiency in its buying and selling division.

The world’s greatest wealth supervisor introduced $2.7bn of revenue earlier than tax for the primary quarter on Tuesday, up 19 per cent on final 12 months and comfortably forward of the $2.4bn predicted by analysts.

Income on the Swiss lender’s funding financial institution greater than doubled in contrast with the primary quarter final 12 months, when it misplaced $774mn within the collapse of household workplace Archegos.

The financial institution benefited within the first quarter of 2022 from a 59 per cent improve in revenues in its buying and selling division because of sturdy efficiency in fairness derivatives, rates of interest and overseas trade.

However its wealth enterprise was hit by a 7 per cent decline in revenues in contrast with the identical interval final 12 months, with UBS saying transaction-based earnings fell 19 per cent as purchasers, notably in Asia, made fewer transactions.

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“The primary quarter was dominated by extraordinary geopolitical and macro occasions,” stated Ralph Hamers, chief government. “In opposition to this backdrop, we remained centered on executing our strategic plans, serving our purchasers and managing danger.”

Analysts at Citigroup anticipated UBS to be the best-performing European funding financial institution within the first quarter, with the lender benefiting from greater revenues in its international markets division, which is concentrated on equities and overseas trade.

Within the days following Russia’s invasion of Ukraine, UBS revealed it had $10mn in loans excellent to purchasers focused by western sanctions. It stated it additionally had about $200mn of publicity to Russian property used as collateral in Lombard lending and $634mn of direct danger publicity to the nation.

On Tuesday, UBS stated it had diminished its direct danger publicity to Russia by a 3rd to about $400mn.

It added that EU and Swiss guidelines that prohibit accepting deposits of greater than €100,000 from Russians not entitled to dwell within the European Financial Space affected 0.7 per cent of property in its wealth administration division.

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The lender’s share worth is flat this 12 months after recovering from a 28 per cent fall through the early days of the warfare in Ukraine.