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2Q24: USD 1.1 billion net profit with continued customer momentum and continuous integration progress
Ad Hoc announcement pursuant to Art. 53 of the Listing Rules of SIX Exchange Regulation
Highlights
- Second quarter 2024: Pre-tax profit of USD 1.5 billion and pre-tax profit on an underlying basis 1 of USD 2.1 billion, reflecting the strength of our customer business and the disciplined execution of our strategy and integration plans; net profit of USD 1.1 billion
- First half 2024: Profit before tax of USD 3.8 billion and profit before tax on underlying basis 1 of USD 4.7 billion; net profit of USD 2.9 billion , return on common equity tier 1 capital (RoCET1) of 7.5% and return on common equity tier 1 capital (RoCET1) on underlying basis of 9.2%
- Client momentum remains strong: net new money inflows of USD 27 billion in Global Wealth Management and strong transaction volumes in the Investment Bank; highest revenue in a 2Q2 period in Global Markets and underlying revenues in Global Banking up 55% year-on-year, with share of fee pools significantly exceeded across all products
- Non-core and Legacy risk-weighted assets (RWA) down 42% from Q2 2023 , including a decrease of USD 8 billion quarter-on-quarter, primarily driven by active settlements; underlying operating expenses excluding litigation expenses down 17% quarter-on-quarter; revenue of USD 0.4 billion
- Achieved additional gross savings of USD 0.9 billion , representing approximately 45% of our total annualized gross savings target
- Completion of key mergers of legal entities on schedule enables implementation of the next critical phase of customer transfers with the aim of unlocking further cost, capital, refinancing and tax benefits
- Maintaining a solid and resilient balance sheet in any environment with a strong common equity tier 1 (CET1) ratio of 14.9% and a common equity tier 1 (CET1) leverage ratio of 4.9%, supporting the achievement of our 2024 return on capital targets; share buybacks started in June, shares worth USD 467 million already repurchased as of August 9, 2024; total loss absorbency USD 198 billion
- Recognised as “World’s Best Bank” and “Switzerland’s Best Bank” at the Euromoney Awards for Excellence 2024 ; a testament to the effectiveness of our global strategy, our global reach and our capabilities in serving our clients in the home market and around the world.
UBS on Tuesday reported a swing back to profit after two quarterly losses as it smashed first-quarter expectations, with results bolstered by higher wealth management revenues.
The firm said Tuesday that it expects to complete the merger of UBS and Credit Suisse into a single U.S. intermediate holding company in the second quarter, and the merger of its Swiss entities in the third quarter.
UBS on Tuesday reported a swing back to profit after two quarterly losses as it smashed first-quarter expectations, with results bolstered by higher wealth management revenues.
Shares were 9% higher at 8:48 a.m. London time, returning some of April’s losses. UBS shares soared 51.7% last year but have had a more lackluster start to 2024.
Lower expenses and consolidation benefits following the takeover of Credit Suisse in June 2023 also helped the bank post a net profit of $1.8 billion in the first quarter, ahead of a consensus forecast in an LSEG poll of $721.4 million.
The Swiss banking giant is continuing to process the mammoth integration of its former rival. The firm said Tuesday that it expects to complete the merger of UBS and Credit Suisse into a single U.S. intermediate holding company in the second quarter, and the merger of its Swiss entities in the third quarter.
Group revenue in the first quarter totaled $12.74 billion, also higher than expected and up from $10.86 billion in the fourth quarter of 2023. Revenue in its flagship Global Wealth Management unit rose 28% to $6.14 billion, where net new assets came in at $27.4 billion.
The bank’s CET1 capital ratio, a measure of liquidity, was 14.8%, compared to 14.4% the previous quarter.
“We are very pleased because we are making very good progress in our integration plans,” UBS CEO Sergio Ermotti told CNBC’s Silvia Amaro on Tuesday.
The bank meanwhile returned to strong reported net profitability and underlying profitability while strengthening its capital, Ermotti said, adding that there was “still work to be done for the rest of the year.”
Johann Scholtz, analyst at Morningstar, said the strong revenue growth at UBS had particularly pleased investors.
“The market was initially concerned that the Credit Suisse merger would lead to revenue attrition, which would have left cost reduction as the only lever to drive earnings growth,” Scholtz said.
UBS is now likely to focus on balance sheet management and accelerating the wind-down of Credit Suisse’s legacy trading positions to release substantial capital, Scholtz continued.
Combined with a likely rise in future fee income due to net inflows into wealth management, this would be “more than sufficient” to meet the potential increase in capital requirements that has been mooted by Swiss regulators, he added.
During the bank’s investor day last month, UBS Group Chairman Colm Kelleher criticized the proposals as he argued the institution was not “too big to fail.”
UBS is Recognised as “World’s Best Bank” and “Switzerland’s Best Bank” at the Euromoney Awards for Excellence 2024
Secondary Source: CNBC World
