UBS Q2 Profit Climbs On Wealth Management Fees; Stock Up

(RTTNews) - Shares of UBS Group AG were gaining around 4 percent in Swiss trading after the banking giant reported Tuesday higher profit in its second quarter, with good growth in all divisions, mainly Wealth Management. Further, the company said it intends to repurchase $0.6 billion of shares during the third quarter.

In the Global Wealth Management segment, recurring net fee income increased 30 percent, primarily driven by higher average fee-generating assets, reflecting positive market performance and higher net new fee-generating assets. The segment recorded $25 billion of net new fee-generating assets with inflows in all regions.

Ralph Hamers, UBS's Group CEO said, "Our clients invested more with us - in private markets and separately managed accounts. They came to us to finance their homes and their businesses, and to create liquidity buffers for unforeseen events, all of which led to an increase in net new loans year-on-year.....Momentum is on our side and our strategic choices and initiatives are paying off."

For the second quarter, net profit attributable to shareholders was $2.01 billion, up 63 percent from last year's $1.23 billion. Earnings per share were $0.55, higher than $0.33 per share last year.

Sequentially, attributable profit grew 10 percent from $1.82 billion reported in the preceding first quarter.

In the second quarter, profit before tax climbed 64 percent from last year to $2.59 billion.

Profit before tax in the Global Wealth Management climbed 47 percent with growth in all regions. The increase was 100 percent in Personal & Corporate Banking, 62 percent in Asset Management, and 9 percent in Investment Bank.

Operating income increased 21 percent from last year to $8.98 billion from last year's $7.40 billion.

The company noted that all business divisions and all regions contributed to the results.

In the quarter, net interest income was $1.63 billion, up 17 percent from last year, and up 1 percent from sequential first quarter. Net fee and commission income was $5.56 billion, up 29 percent from last year, but down 2 percent sequentially.

Personal & Corporate Banking operating income increased 31 percent, and the growth was 27 percent in Asset Management largely due to 31 percent higher net management fees. Investment Bank operating income increased 9 percent.

Return on common equity tier 1 or CET1 capital1 was 19.3 percent, compared to 13.2 percent a year ago.

In Germany, UBS shares were trading at 13.87 francs, up 3.90 percent.