Wealth management unit helps propel UBS back to profit
UBS Group AG returned to profit after two loss-making quarters, with both wealth management and the investment bank adding to sustained progress in the integration of Credit Suisse after its emergency rescue last year.
The Zurich-based bank said net income in the first quarter was $1.8 billion, compared with analysts’ estimates of $598 million. The key wealth management unit saw net new assets come in better than expected at $27 billion, while the combined investment bank reported an upbeat performance in the US that helped return the first profit since the takeover.
UBS surged after the release, up 8.1% as of 09:40 a.m. in Zurich.
With the bank targeting the completion of the legal merger with Credit Suisse by May 31, a robust set of results will buttress UBS Chief Executive Officer Sergio Ermotti as he grapples with a tightening regulatory outlook. The Swiss government last month proposed an increase in the capital levels that UBS is required to maintain that could run to around $20 billion.
Given that the implementation of the new rules is likely to come in 2026 at the earliest, Ermotti signaled that UBS intends to return about $2 billion to investors over the next two years.
“We also see good momentum with clients, with inflows across our businesses, and our capital is strong, so allowing us to continue to pursue our capital return plans,” Ermotti said in an interview with Bloomberg Television’s Francine Lacqua on Tuesday.
A big boost to the performance came from a continued revaluation of the assets and liabilities UBS bought as part of the Credit Suisse takeover last year. The bank also booked a $272 million gain in the unit dedicated to winding down Credit Suisse businesses, related to the sale of assets to
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