Global Wealth Management boosts UBS earnings
UBS delivered strong second-quarter results with reported profit before tax (PBT) up 12% year over year to CHF 1,679m and adjusted2 PBT up 8% to CHF 1,808m. Net profit attributable to shareholders was CHF 1,284m, up 9% from the second quarter of 2017. Adjusted return on tangible equity (RoTE) excluding DTAs was 16.7% for the quarter.
Global Wealth Management’s PBT rose 18% YoY to CHF 1,037m, driven by double-digit PBT growth in the Americas and the ultra-high net worth segment, and ten-year records in recurring net fee, net interest income, lending and mandate penetration.
Personal & Corporate Banking PBT was CHF 368m, as growth in recurring net fee and transaction-based income offset the ongoing pressure from the negative interest rate environment; net new business volume growth remained strong. Asset Management reported PBT of CHF 101m, as the positive impact from higher invested assets mostly offset the effect of a prior-period business sale and pressure on margins, and invested assets rose to CHF 810bn, the highest in a decade. The Investment Bank delivered PBT of CHF 569m, up 26% YoY, and an adjusted2 return on attributed equity of 23%, on strong revenue growth in Equities and Foreign Exchange, Rates and Credit (FRC) and continued resource discipline.
During the second quarter, UBS repurchased CHF 550m of its own shares, meeting its target for 2018 under its 3-year share repurchase program of up to CHF 2bn. UBS’s capital position remains very strong, with a CET1 capital ratio of 13.4%, a CET1 leverage ratio of 3.75% and total loss-absorbing capacity of over CHF 81bn.
Net management fees were broadly unchanged, despite a business sale in the fourth quarter of 2017 and continued pressure on margins. Performance fees decreased, primarily in alternatives. Adjusted expenses decreased as lower personnel costs, driven by management actions, were partly offset by higher investments in technology. The adjusted cost/income ratio was 74%. Net new money excluding money market flows was CHF 27.6bn, and invested assets reached CHF 810bn, the highest in a decade. Reported PBT decreased by 3% to CHF 207m.