Cristina Roca
UBS Group AG announced results for the first quarter Tuesday morning. Here’s a look at what we saw:
NET PROFIT REVIEW – UBS reported a quarterly net loss of $2.14Billion in the third quarter, compared with $1.82Billion a year earlier and a company consensus estimate at $1.79B.
REVIEW OF OPERATING IMPACT: The quarter’s operating income was $9.36 Billion, which is 8% more than the year before. The same consensus had been reached by analysts that expected the Swiss bank’s operating income to be $8.83 billion.
WHAT WE VIEWED:
-INVESTMENT BANCK BOOST: UBS’s expectations-beating print was fueled by an increase in client trade in its investment bank. This is similar to a trend observed in its U.S. counterparts. In a research note, Benjamin Goy and Sharath Kumar Ramanathan, Deutsche Bank analysts, said that the company has fared well in a difficult environment. “This will likely to only become more obvious with reporting by European peers,” DB said.
-WEALTH MANAGEMENT. Although the investment bank performed very well, revenue at UBS’s key wealth management division fell below expectations, DB stated. UBS reported that transaction-based income fell due to lower client activity in the Asia-Pacific region. However, UBS stands to gain from rising U.S. interest rates. During an earnings presentation Kirt Gardner, Chief Financial Officer, said that the bank expects to see a 1 billion increase in net income for the remainder of the year. The majority of this will be in the second quarter.
-RUSSIA HIT : The company reported a $100 million hit to its profit and loss accounts due to Russia exposure. It stated that it had reduced its exposure to Russia to $400 million by March 31, compared to $600 million at 2021.
Write to Cristina Roca at [email protected]