UBS Q1 Profit Climbs; Stock Down

(RTTNews) - Swiss banking giant UBS Group AG (UBS) reported Monday higher profit in its first quarter with increased net interest income. The company said it has had an excellent start to 2018. However, UBS shares were trading around 3 percent lower in Switzerland.

Looking ahead, Sergio Ermotti, Group Chief Executive Officer, said, "Momentum in our businesses is good, and we expect our results in the second quarter to provide further evidence of the strengths of our diversified business model, as well as our progress towards achieving our strategic and financial targets."

Ermotti noted that all of UBS's businesses are affected by economic growth expectations, interest rates, equity market levels and foreign exchange rates. While higher compared with last year's historic lows, market volatility remains muted overall which is usually less conducive to client activity.

The company added that due to seasonal factors, second-quarter transaction-based income in Investment Bank and Global Wealth Management businesses is also typically lower than in the first quarter.

For the first quarter, the bank's net profit attributable to shareholders was 1.51 billion Swiss francs, 19.4 percent higher than last year's 1.27 billion francs.

Earnings per share were 0.39 franc, up from 0.33 franc a year ago.

Profit before tax grew 17 percent year-over-year to 1.97 billion francs. In US dollar terms, profit before tax climbed 24 percent.

The first quarter of 2018 included a gain of 225 million francs related to changes to the pension fund of UBS in Switzerland, and 128 million francs of restructuring expenses.

Adjusted profit before tax was 1.88 billion francs.

UBS reported that global Wealth Management had a very strong quarter with year-on-year profit growth and positive net new money in all regions. Adjusted profit before tax rose 7 percent year over year to 1.13 billion francs. The growth was 14 percent in US dollar terms.

Investment Bank's adjusted profit before tax rose 13 percent.

Total operating income grew to 7.70 billion francs from 7.53 billion francs a year ago. Net interest income improved 3 percent from last year to 1.74 billion francs. Net fee and commission income grew 3 percent to 4.47 billion francs.

In the global Wealth Management segment, higher invested asset levels and net interest margins, together with further progress on mandate penetration and loan growth, as well as increased client activity, led to an improvement in all revenue lines, the company noted.

UBS shares were trading at 16.60 francs, down 3.46 percent.