UBS Stock Up On Higher Q2 Profit, Despite Weak Net Interest Income

(RTTNews) - Shares of UBS Group AG (UBS) were gaining around 4 percent in the morning trading after the Swiss banking giant reported Tuesday higher profit in its second quarter with increased operating income. Net operating income, meanwhile, declined.

Looking ahead, the company noted that in addition to typical seasonality factors in the third quarter, market volatility remains muted overall which is usually less conducive to client activity.

As in the first half of the year, the company expects the diversified business model to help make continued progress towards achieving strategic and financial targets.

For the second quarter, net profit attributable to shareholders increased 9 percent to 1.28 billion Swiss francs from last year's 1.17 billion francs. Earnings per share were 0.33 franc, higher than 0.31 franc last year.

Profit before tax grew 12 percent year-over-year to 1.68 billion francs. Adjusted profit before tax went up 8 percent to 1.81 billion francs. The profit was driven by 18 percent rise in Global Wealth Management segment with double-digit growth in the Americas, and 26 percent jump in Investment Bank segment.

Total operating income increased 4 percent to 7.55 billion francs from last year's 7.27 billion francs. Net interest income, meanwhile, fell 30 percent from last year to 985 million francs.

Net fee and commission income for the quarter grew 2 percent from last year to 4.38 billion francs.

Sergio Ermotti, Group Chief Executive Officer, said, "I'm pleased with the second quarter, which contributed to a strong first half, with particularly good capital generation. We'll keep our focus on growth and efficiency, and continue to build on the strengths of our global franchise."

In Switzerland, UBS shares were trading at 15.88 francs, up 3.86 percent.