Cristina Roca
UBS Group AG reported its first quarter results on Tuesday morning. Here’s a look at what we watched:
NET PROFIT REVIEW: UBS reported a quarterly profit of $2.14 Billion, compared to $1.82 Billion a year ago and a consensus estimate of $1.79 Billion.
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 SEEN:
-INVESTMENT BOOST: UBS’s expectation-beating print was driven in part by an increase in client trading at its investment bank. This trend is similar to that seen in its U.S. peers. 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 stated.
-WEALTH MANAGEMENT. While UBS’s investment bank performed well, UBS’s key division for wealth management saw revenue that was below expectations. UBS reported that transaction-based income fell due to lower client activity in the Asia-Pacific region. The rising interest rates in the U.S. will benefit the unit. 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 claimed it had reduced its exposure in Russia to $400million as of March. This compares to $600 million at end 2021.
Write to Cristina Roca at [email protected]