UBS shows signs of resilience as first quarter earnings surprise with rise

The logo of Swiss bank UBS is seen at its headquarters in Zurich, Switzerland, February 17, 2021. REUTERS/Arnd Wiegmann

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ZURICH, April 26 (Reuters) – UBS’s (UBSG.S) first-quarter net profit rose 17% on Tuesday to its highest level since 2007 on strong trading, upending expectations a decline in a context of uncertainties related to the war in Ukraine.

Net profit for the March quarter of $2.136 billion beat average expectations of $1.79 billion in a poll of 21 analysts compiled by the Swiss bank.

One of the first two major European banks to report results alongside HSBC (HSBA.L), UBS’s earnings contrast sharply with the profit declines of its U.S. peers reported this month.

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“In the first quarter, we remained focused on the execution of our strategy, the stability of our customers and the management of risk,” Chief Executive Ralph Hamers said in a statement. “Our solid results today demonstrate our ability to achieve our objectives, whatever the context.”

The results show Switzerland’s biggest bank is on track to meet improved earnings targets set by Hamers in February and has widened the gap between it and smaller rival Credit Suisse (CSGN.S), which struggles under the weight of a chain of scandals.

Credit Suisse announced an early first-quarter loss last week after increasing legal provisions, seeing business activity slow and being hit by the fallout from Russia’s invasion of Ukraine. Read more

Wall Street banks have come under pressure amid a global trading slump, but volatility fueled by concerns over interest rate hikes and the economic fallout from the war in Ukraine has helped trading desks to shatter expectations.

UBS’s investment bank saw pre-tax profit rise 126% as a 59% rise in global markets trading revenue offset a 30% drop in capital markets and advisory revenue due to the slowdown in trading and IPOs.

In the prior year period, the investment bank’s results were hampered by a loss of $774 million following the collapse of US client Archegos. Without it, global markets revenue would have risen 4%, UBS said.

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Reporting by Brenna Hughes Neghaiwiö; Editing by Michael Shields and Muralikumar Anantharaman

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