UBS earnings q1 2021

LONDON – UBS reported internet earnings of $ 1.Eight billion for the primary quarter of 2021 on Tuesday because it impacted earnings from the Archegos Capital scandal. UBS inventory fell practically 2% in early European buying and selling hours.

The Swiss financial institution introduced that revenues fell by $ 774 million because of the failure of the Archegos hedge fund, which collapsed final month after taking an excessive amount of danger. The US-based household workplace was a shopper of UBS’s prime brokerage enterprise.

UBS introduced Tuesday that it had given up all holdings in Archegos and that any associated losses within the second quarter could be “negligible” to the financial institution.

Plenty of banks have been hit by the scandal, together with Credit Suisse, which posted a internet loss for the quarter final week that was in comparison with a lack of 4.Four billion Swiss francs ($ 4.Eight billion) as a result of its collapse US hedge funds.

UBS CEO Ralph Hamers stated Tuesday in an interview with CNBC’s Joumanna Bercetche that the financial institution was “very disenchanted” with the success.

“We take this very critically. We have began a really detailed assessment of the varied prime dealer relationships, the connection with household workplaces and the chance administration processes that we’ve got to essentially get what we’ve got discovered and ensure we use them.” implement it so it would not occur once more sooner or later, “he stated.

Hamers added that the prime brokerage enterprise is “strategic” and that its capabilities help the broader enterprise, however UBS must study from what occurred with Archegos.

UBS internet revenue rose 14% yr over yr for the primary quarter. According to Refinitiv, analysts had anticipated a worth of 1.6 billion US {dollars} within the reporting interval.

Further highlights of the quarter:

  • Operating revenue was $ 8.7 billion in comparison with $ 7.9 billion a yr in the past.
  • Operating prices have been $ 6.Four billion in comparison with $ 5.9 billion a yr in the past.
  • The CET 1 fee, a measure of the solvency of banks, reached 14% in comparison with 12.8% a yr in the past.

Hamers stated the financial institution had “repeatedly elevated buyer exercise” this quarter.

“In truth, the efficiency within the areas of wealth administration, asset administration, funding banking and likewise within the actions right here in Switzerland was superb,” he advised CNBC.

“So from that perspective an actual, balanced and robust quarter if we did not have the loss we suffered, however even after the loss we bought a return of 18.2% on CET1, which is basically good.” Result.”

UBS stated that future income within the second quarter will likely be affected by “seasonal elements” akin to decrease shopper exercise in comparison with the primary three months of the yr. The Swiss financial institution expects greater asset costs to have a constructive impact, however cautioned that there’s “ongoing uncertainty” in regards to the financial restoration that would have an effect on its subsequent income.

“We ought to all bear in mind that there’s a lot of optimism available in the market and that there’s clearly a variety of excellent news that has come to the market, however I additionally wish to take a look at among the challenges we’re seeing. Will the pandemic be over.” “That is the query. Will vaccination go on as it’s? How will the financial system actually recuperate?” Hamers stated.

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