UBS has a net profit of 2.1bn in Q1 2022. USD generated. This is the best quarterly result since 2007. This was well above expectations for the major bank. While Asset Management declined somewhat, the Investment Bank more than doubled pre-tax profits. Swiss business also grew above estimates.
UBS’s pre-tax profit in first quarter 2022 increased 19% year-on-year to. USD, including a credit loss recovery of USD 18 million. USD, as announced by the big bank on Tuesday. The cost-to-income ratio decreased 3.1 percentage points year-over-year to 70.7%. Operating income increased by 8% year-on-year, while operating expenses rose by 4%. 2136 million, the best quarterly result since 2007. USD (+17% YoY), and diluted earnings per share were 0.61 USD.
Return on Common Equity Tier 1 (CET1) capital was 19.0 percent. At quarter end, common equity tier 1 (CET1) ratio was 14.3% (target: ~13%) and common equity tier 1 (CET1) leverage ratio was 4.16% (target:>3.7%). UBS bought 1.7 billion shares in the first quarter of 2022. USD, over the full year 2022 it intends to buy shares worth a total of approximately. USD repurchase.
"The first quarter was marked by extraordinary geopolitical and macroeconomic events. Against this background, our focus remained on implementing our strategic plans, serving our customers and managing risks", said CEO Ralph Hamers.
Decline in Global Wealth Management
Pre-tax profit in Global Wealth Management (GWM) decreased 7% year-on-year to. USD decline. Cost/income ratio increased 2.5 percentage points year-over-year to 73.4%: Operating income increased 1% and operating expenses increased 5% due to higher financial advisor compensation and provisions for litigation and restructuring costs. Credit volumes decreased from the previous quarter to 230 billion. USD, with net new lending of 0.5 billion. USD.
Assets under management increased 5% quarter-on-quarter to 3145 billion. USD from. Fee-generating assets decreased 5% quarter-on-quarter to 1414 billion. USD back. 19.4 billion in net inflows of fee-generating assets. USD, corresponding to an annualized growth rate of 5% in the quarterly.
Swiss business is on the rise
The staff& Corporate Banking (P&C) posts pre-tax profit of 395 million. CHF , which is 10% more than in the previous year. Operating income increased 3%. The cost/income ratio decreased by 5.3 percentage points year-on-year to 58.5%: While operating income increased 8%, operating expenses decreased 1%. This was mainly due to lower real estate expenses for UBS branches, which had been partially offset by higher investments in technology.
Significant decline in Asset Management profits
In Asset Management (AM), pre-tax profit in the first quarter was 174 million. USD (-23% YoY). Operating income declined 9% from a year earlier as the increase in net management fees offset the decline in performance fees from the "exceptionally high level" in the first quarter of 2021 could not offset. The cost-to-income ratio increased 5.5 percentage points year-over-year to 69.8%: Operating income declined 9% from the year-ago period, and operating expenses fell 2%. Assets under management increased 5% quarter-on-quarter to 1154 billion. USD from. Net new money inflows were 7.7 billion. USD (14.2 billion. USD excluding money market fund flows).
Investment Bank (IB) with good trading performance
The increase of 126% in pre-tax profit in the Investment Bank (IB) to 929 million. USD and the 28% year-on-year increase in operating income are put into perspective by the loss for the first quarter of 2021: If you factor out the loss of 774 million. USD related to the default of a U.S. client in UBS’s prime brokerage business, operating income declined by 5%.
Income in Global Markets increased by 59% and. 875 million. USD. Excluding the aforementioned loss in the prior-year quarter, Global Markets would have reported an increase of 4% or. 101 million. The bank’s pre-tax profit in Asset Management (AM) was USD 174 million in the first quarter, significantly ahead of expectations, mainly due to higher revenues in Equity Derivatives, Rates and Foreign Exchange, partially offset by a decline in Capital Markets Financing. Global Banking reported a decline of 30% resp. 238 million. USD. This was mainly due to a decline in revenues in Capital Markets (mainly Equity Capital Markets). The cost/income ratio improved by 14.0 percentage points to 67.9% compared to the previous year, as income increased by 28% and operating expenses increased by 6%. Return on allocated equity was 28.2%.
Cautious outlook
At a glance. The major bank pointed to increased uncertainty about the sustainability and shape of the economic recovery and question marks about deglobalization and inflation. Investor sentiment had become more cautious in the first quarter of 2022.
The further development of economic growth has thus become much more uncertain. However, UBS expects economic activity to continue to increase, although higher uncertainty may continue to negatively impact client activity and assets. Meanwhile, rising interest rates, especially in the dollar zone, should lead to higher net interest income.
Meanwhile, the major bank has further reduced its direct country risk in Russia – to just. USD as of the end of March after 0.6 billion. End of 2021. The Russian engagement also had a negative impact on the income statement of around 100 million. USD. Among other things, this involved a trade finance exposure in the Swiss business and a loan in the Investment Bank.