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UBS’s $29 Billion Second Quarter Profit: A Triumph of Management After Credit Suisse Acquisitio
UBS News: $29 Billion Second Quarter Profit
UBS, the largest Swiss bank, has reported a $29 billion second quarter profit, the first results since the bank’s acquisition of Credit Suisse earlier this year. The second quarter profit is a 27% jump from the same time last year, with net income at CHF 3.4 billion ($3.7 billion) and net interest income at CHF 6.8 billion ($7.5 billion).
The strong financial results have been credited to the bank’s growth in revenue from asset management, private banking, and investment banking activities. UBS also reported that it achieved a record 6% increase in wealth management net new money while maintaining strong client activity in the Americas, Europe, and Asia regions.
The bank’s newly appointed Chief Executive Officer, Ralph Hamers, said in a statement that he was pleased with the steady performance of the bank’s core businesses despite volatility in the markets. He added that the bank’s balance sheet remained well-positioned and is well-equipped for future growth.
UBS Chairman Axel Weber noted that the merger of UBS and Credit Suisse was the bank’s most significant strategic move in many years and was an important step in its journey to become the preeminent wealth management provider in the world.
The acquisition of Credit Suisse has given UBS a much-needed boost in the private banking market, giving it access to more wealthy customers throughout the world. It has also allowed the bank to offer a wider range of services, including risk and asset management, lending, and advice.
The second quarter profit reported by UBS marks an impressive start to the post-merger era. With its strong balance sheet and broadened capabilities, the bank now has the potential to become a major player in the global wealth management sector in the years ahead.UBS posted a record second-quarter profit of $29 billion, the first earnings results since the Swiss banking giant’s merger with Credit Suisse earlier this year.
The Swiss banking giant said its performance during the second quarter was buoyed by strong wealth management and investment banking business as markets continued to recover from the Covid-19 pandemic.
The profit came in well ahead of analysts’ estimates and marked a dramatic turnaround for UBS, which had suffered losses of $4.7 billion in the same period last year.
UBS’s results were driven by strong gains in its wealth management business, which posted a pre-tax profit of $2.5 billion, a 5 percent increase from the same period in 2020.
The company’s investment banking division earned $1.7 billion in pre-tax income, a 28 percent increase from a year earlier.
UBS Chief Executive Officer Ralph Hamers said the firm’s performance underscored its “underlying strength and resiliency.”
“Our results this quarter show the benefits of UBS’s global diversification and demonstrate the strength of the combination with Credit Suisse,” he said in a statement.
UBS also said it had seen an increase in net new money flows into its wealth management business and said it was on track to meet its targets for the full year.
The bank’s second-quarter earnings come amid a broader recovery in the financial markets, as investors continue to pour money into stocks and bonds following the easing of lockdown measures.
The results also reflect the success of UBS’s post-merger cost-cutting program, which has resulted in the elimination of thousands of jobs across the two banks.
At the same time, UBS has sought to expand its reach in other areas, such as asset management and specialty banking, as part of a long-term strategy to diversify its revenue streams.
The strong second-quarter results come after UBS reported a net loss of $277 million in the first quarter, which was largely due to the cost of the merger with Credit Suisse.
UBS’s earnings announcement was welcomed by investors, with the company’s share price rising 1.7 percent in early trading.
