Reports

UBS Says Q2 Pre-Tax Profits Bounced From Year Ago

Editorial Staff, 21 July 2021

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Global wealth management saw $25 billion of net new fee-generating assets with inflows in all regions, the Swiss banking group said.    

UBS today said that its global wealth management business logged $1.29 billion in pre-tax profits in the second quarter of 2021, dipping from $1.4 billion in the previous quarter but still up sharply (47 per cent) from $880 million a year ago. 

Recurring net fee income rose by 30 per cent year-on-year, reflecting positive market performance and higher net new fee-generating assets, the Zurich-listed banking group said. Transaction-based income rose by 16 per cent on high levels of client activity. 

Net credit loss costs narrowed to $14 million, from $64 million a year earlier.

Like other banks reporting financial results in the past few days, UBS’s results benefited from having been able to cut the amount of provisions for credit losses made a year ago to handle the pandemic. At group level, UBS said pre-tax profit was $2.593 billion, rising 64 per cent on a year ago, and that result included credit loss releases of $80 million. 

Among further details of its global wealth management business, UBS said its cost/income ratio narrowed by 3.3 percentage points to 73.1 per cent, as income rose by 19 per cent and operating costs rose by 14 per cent. 

Fee-generating assets rose to $1.416 trillion at the end of June this year, rising 7 per cent sequentially; the bank logged $25 billion of net new fee-generating assets, translating to an annualised growth rate of 8 per cent in the quarter, it said. Total invested assets stood at $3.2 trillion.

At the end of June the bank said it had a Common Equity Tier 1 ratio of 14.5 per cent.

Asia
Within Asia-Pacific, the bank said that its pre-tax profit rose by $50 million to $283 million. Operating income increased by $53 million, or 8 per cent, to $711 million, mainly driven by recurring net fee and transaction-based income.

The Asian cost/income ratio decreased from 64.6 per cent to 60.2 per cent. 

Fee-generating assets increased 6 per cent sequentially to $119 billion, mainly driven by $3.8 billion of net new fee-generating assets, as well as net effects from positive market performance and foreign currency effects of $3.3 billion.

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