UBS Gets Business Back on Track

Switzerland’s largest bank indicated that profitability in the second quarter returned to the levels it saw before being forced to rescue Credit Suisse.

UBS indicated that profit before taxes in the second quarter was $1.5 billion, a media release sent by the group on Tuesday (year-earlier figures are not directly comparable given the first-time integration of Credit Suisse).

The bank nevertheless said it experienced continued client momentum, with its core wealth management business seeing net new assets of $27 billion.

Of the net new assets, UBS said $16 billion were fee-generating assets. In the first half, net new assets totaled $54 billion, it indicated.

Beyond that, UBS’s investment bank saw strong transactional activity, with the Global Markets business, where revenues were up 18 percent, experiencing its best second-quarter performance since 2013.

Overall, the bank maintained that it had returned to the levels of profitability it had before being forced to rescue its former peer and competitor, Credit Suisse.

We are now entering the next phase of our integration, which will be critical to realize further substantial cost, capital, funding and tax benefits, the media release stated.

It realized additional cost savings of $0.9 billion in the second quarter, which corresponds to 45 percent of the cuts it is targeting by the end of 2026.

By the end of this year, it expects to be in a position to realize 55 percent, or more than half, of its final target.

The bank also managed to reduce risk-weighted assets in its non-core and legacy business by 42 percent year-on-year while its CET1 capital ratio was at 14.9 percent and its CET leverage ratio at 4.9 percent.

It also restarted its share buyback program with the total amount of shares bought back at $467 million as of 9 August.

The outlook for the remainder of the year continues to be «clouded by ongoing conflicts, other geopolitical tensions and the upcoming US elections.

Entering the third quarter, we are seeing positive investor sentiment and continued momentum in client and transactional activity,» the bank maintained.