UBS beat analysts’ forecasts with a 19 percent increase in quarterly profits, thanks to strong performance in its trading department.
The world’s largest asset manager announced 2.7 billion on Tuesday. USD in net profit for the first quarter, comfortably ahead of the 2.4 billion. USD, as analysts predicted.
The Swiss lender’s investment bank’s profit more than doubled compared to the first quarter of last year, when it lost $ 774 million in the collapse of the Archegos family office.
The bank benefited from a 59 percent increase in revenue in its trading division in the first quarter of 2022 due to strong performance in equity derivatives, interest rates and currency.
But UBS’s asset business was hit by a 7 percent drop in revenue compared to the same period last year, when the group said transaction-based revenue fell 19 percent as customers, particularly in Asia, made fewer transactions.
“The first quarter was dominated by extraordinary geopolitical and macro events,” said Ralph Hamers, CEO. “Against this background, we remained focused on executing our strategic plans, serving our customers and managing risks.”
Analysts at Citigroup expected UBS to be the best-performing European investment bank in this reporting season, with the lender benefiting from higher earnings in its global market-focused equities division.
In the days following Russia’s invasion of Ukraine, UBS revealed that it had 10 million. USD in loans outstanding to customers affected by Western sanctions. It said it also had about $ 200 million in exposure to Russian assets used as collateral in Lombard loans and $ 634 million in direct risk exposure for the country.
UBS said Tuesday it had reduced its direct risk exposure to Russia by a third to about $ 400 million.
It added that EU and Swiss rules banning the receipt of deposits of more than € 100,000 from Russians not eligible to live in the European Economic Area affected 0.7 per cent of the assets of its asset management department.
The lender’s share price is flat this year after recovering from a 28 percent drop in the early days of the Ukraine war.