General view of the UBS constructing in Manhattan, New York City, on June 5, 2023.
Eduardo Munoz Alvarez | View Press | Corbis News | Getty Images
Swiss banking giant UBS beat expectations for second-quarter net income on Wednesday as revenue at its global wealth management and investment banking units rose sharply.
Net income attributable to shareholders for the period was $1.136 billion, in comparison with a consensus forecast prepared by the corporate of $528 million.
However, earnings were below the $1,755 reported in the primary quarter, as analysts had expected.
The group’s revenue also exceeded forecasts within the second quarter, reaching $11.904 billion, in comparison with $11.522 billion in a survey conducted by LSEG.
UBS said strong activity in capital markets partially offset the negative impact on net interest income, which UBS had previously said can be weaker on account of lower loan and deposit volumes and lower Swiss rates of interest.
In the Global Wealth Management division, revenues rose 15 percent to $6.053 billion, which UBS said was mainly on account of the consolidation of Credit Suisse. In the investment banking division, revenues rose 38 percent to $2.803 billion.
In its outlook, UBS said the macroeconomic outlook “continues to be clouded by ongoing conflicts, other geopolitical tensions and the upcoming US elections.”
It continued: “We expect these uncertainties to persist for the foreseeable future and will likely result in greater market volatility compared to the first half of the year.”
UBS returned to profit in the primary quarter after two quarterly losses, but warned that net interest income would decline in each the worldwide wealth management business and the private and company client business.
It has now been over a 12 months since UBS formally acquired Credit Suisse, triggering an enormous integration process and making a wealth management giant. UBS said By early July, the merger process was accomplished and Credit Suisse – the Swiss bank that spectacularly collapsed in March 2023 after years of economic scandals – not existed as an independent company.
The bank now expects to realize cumulative gross savings from the Credit Suisse deal of $7 billion by the tip of 2024. Its goal was $13 billion by 2026 (base 12 months 2022). It had previously set itself the goal of saving $6.5 billion by the tip of the 12 months.
UBS has cut jobs and reduced risk-weighted assets as a part of the merger process. On Wednesday, the bank announced that it now expects cost savings of $7 billion by the tip of 2024. It had previously targeted around $6.5 billion for this era.
