UBS reported making a profit again after losing money for two quarters. Its earnings for the first quarter were much better than expected, mostly because its wealth management business brought in more money.
At 8:48 a.m. London time, UBS’s shares were up by 9%, bouncing back from a drop in April. Last year, UBS’s shares did well, going up by 51.7%, but they haven’t been doing as well in 2024.
The bank made a net profit of $1.8 billion in the first quarter, which was way more than what experts predicted. This happened partly because the bank managed its expenses better and got benefits from taking over Credit Suisse in June 2023.
UBS is still working on combining itself with Credit Suisse. They plan to finish this by making one big company in the US in the second quarter and merging their Swiss parts in the third quarter.
In the first quarter, UBS made $12.74 billion in total revenue, which was also higher than expected. The part of the bank that manages wealth had a 28% increase in revenue, making $6.14 billion, with new assets worth $27.4 billion.
The bank’s CET1 capital ratio, which shows how much money it has for emergencies, was 14.8%, a bit higher than the previous quarter.
UBS’s CEO, Sergio Ermotti, said they’re happy with the progress of merging with Credit Suisse. He also said that while the bank is doing well, there’s still more to do for the rest of the year.
Johann Scholtz, an analyst at Morningstar, said investors were really happy with UBS’s strong revenue growth. They were worried that merging with Credit Suisse might hurt UBS’s income, but that didn’t happen.
Scholtz thinks UBS will now focus on managing its finances better and getting rid of Credit Suisse’s old trading stuff to free up money. With more people putting money into wealth management, UBS should have enough money to meet new rules from Swiss regulators.
During a meeting with investors last month, UBS’s Chairman, Colm Kelleher, criticized the new rules, saying that UBS isn’t too big to fail.
