Cristina Roca
UBS Group AG reported its first quarter results on 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 consensus estimate by the company of $1.79B.
OPERATING INCOME REVIEW – Operating income for the quarter was $9.36 billion, an increase of 8% over year. According to the same consensus, analysts had predicted that the Swiss bank would post an operating income of $8.83billion.
WHAT WE VIEWED:
-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. According to Deutsche Bank analysts Sharath Kumar Ramanathan and Benjamin Goy, the company has performed well in a challenging 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 stated that transaction-based income decreased due to lower client activity, particularly in the Asia-Pacific. However, UBS stands to gain from the U.S.’s rising interest rates. During an earnings presentation Kirt Gardner, Chief Financial Officer, stated that the bank anticipates a $1 billion increase in net interest income for rest of the year. Most of this will take place in the second half.
-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 $600million at the end 2021.
Write to Cristina Roca at [email protected]