UBS on Tuesday reported a swing again to revenue after two quarterly losses because it smashed first-quarter expectations, with outcomes bolstered by increased wealth administration revenues.
Shares had been 9% increased at 8:48 a.m. London time, returning a few of April’s losses. UBS shares soared 51.7% final 12 months however have had a extra lackluster begin to 2024.
Decrease bills and consolidation advantages following the takeover of Credit score Suisse in June 2023 additionally helped the financial institution publish a web revenue of $1.8 billion within the first quarter, forward of a consensus forecast in an LSEG ballot of $721.4 million.
The Swiss banking large is continuous to course of the mammoth integration of its former rival. The agency stated Tuesday that it expects to finish the merger of UBS and Credit score Suisse right into a single U.S. intermediate holding firm within the second quarter, and the merger of its Swiss entities within the third quarter.
Group income within the first quarter totaled $12.74 billion, additionally increased than anticipated and up from $10.86 billion within the fourth quarter of 2023. Income in its flagship World Wealth Administration unit rose 28% to $6.14 billion, the place web new property got here in at $27.4 billion.
The financial institution’s CET1 capital ratio, a measure of liquidity, was 14.8%, in comparison with 14.4% the earlier quarter.
“We’re more than happy as a result of we’re making superb progress in our integration plans,” UBS CEO Sergio Ermotti advised CNBC’s Silvia Amaro on Tuesday.
The financial institution in the meantime returned to robust reported web profitability and underlying profitability whereas strengthening its capital, Ermotti stated, including that there was “nonetheless work to be achieved for the remainder of the 12 months.”
Johann Scholtz, analyst at Morningstar, stated the robust income development at UBS had significantly happy traders.
“The market was initially involved that the Credit score Suisse merger would result in income attrition, which might have left value discount as the one lever to drive earnings development,” Scholtz stated.
UBS is now prone to concentrate on steadiness sheet administration and accelerating the wind-down of Credit score Suisse’s legacy buying and selling positions to launch substantial capital, Scholtz continued.
Mixed with a probable rise in future payment earnings as a consequence of web inflows into wealth administration, this is able to be “greater than adequate” to fulfill the potential enhance in capital necessities that has been mooted by Swiss regulators, he added.
In the course of the financial institution’s investor day final month, UBS Group Chairman Colm Kelleher criticized the proposals as he argued the establishment was not “too huge to fail.”
