UBS, Switzerland’s largest bank, has announced a significant return to profit following two consecutive quarterly losses, sending its shares soaring by 8.9% during early trading hours on Tuesday. The impressive first-quarter results surpassed expectations, largely attributed to a surge in wealth management revenues.
The bank’s performance signals a remarkable turnaround, particularly after experiencing a lackluster start to 2024 despite a remarkable 51.7% surge in shares throughout the previous year.
Aided by lower expenses and consolidation benefits stemming from its takeover of Credit Suisse in June 2023, UBS reported a net profit of $1.8 billion for the first quarter. This figure outpaced the consensus forecast of $721.4 million, as per an LSEG poll.
The ongoing integration of Credit Suisse remains a pivotal focus for UBS. The bank anticipates completing the merger of UBS AG and Credit Suisse AG into a single U.S. intermediate holding company by the second quarter and the merger of its Swiss entities by the third quarter.
CEO Sergio Ermotti expressed satisfaction with the progress of the integration plans, highlighting the bank’s robust revenue growth. Group revenue for the first quarter reached $12.74 billion, surpassing expectations and marking a significant increase from $10.86 billion in the fourth quarter of 2023. Notably, revenue from the flagship Global Wealth Management unit surged by 28% to $6.14 billion.
UBS’s CET1 capital ratio, a critical liquidity measure, stood at 14.8%, up from 14.4% in the previous quarter, underscoring the bank’s strengthened financial position.
“We are very pleased because we are making very good progress in our integration plans,” commented CEO Sergio Ermotti in an interview with CNBC’s Silvia Amaro. Ermotti emphasized the bank’s strong reported net profitability and underlying profitability while acknowledging that there is still work to be done for the remainder of the year.
The impressive financial performance and progress in the integration of Credit Suisse bode well for UBS’s future prospects, positioning the bank for sustained growth and profitability in the coming quarters.
