Best in class

24 July 2018 By Christopher Thompson Follow @CGAThompson

The Swiss bank’s first-half pre-tax profit grew 15 percent year-on-year. UBS’s outlook was downbeat, and its prized wealth arm lost 1.2 bln Swiss francs in client mandates, its first quarterly outflow since 2016. Even so, higher quality revenue can help it keep a valuation lead.

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UBS on July 24 announced operating income of 7.5 billion Swiss francs for the second quarter of 2018, an increase of 4 percent on the same period last time. Pre-tax profit was 1.67 billion Swiss francs, up 12 percent year-on-year, for the quarter to end-June 2018.

The Swiss bank said quarterly pre-tax profit at its cornerstone global wealth management division grew by 18 percent year-on-year to 1 billion Swiss francs. The unit reported 1.2 billion Swiss francs of net money outflows during the quarter, a measure that includes incoming client funds and exits. That compared with 7.5 billion Swiss francs of net inflows in the same period last year.

UBS earned an annualised return on tangible equity of 11.6 percent for the quarter, against 10.3 percent in the second quarter of 2017. However, adjusting for one-off tax assets, UBS's ROTE was 16.7 percent, compared to 15.9 percent a year earlier.

The lender’s common equity Tier 1 capital ratio was 13.4 percent, compared to 13.1 percent three months earlier.

UBS shares were up 3.5 percent to 15.8 Swiss francs at 0753 GMT on July 24.

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