First quarter – Despite the Ukraine war: UBS increases profit significantly – News

  • Despite the war in Ukraine and rising inflation, UBS did well in the first quarter.
  • It made significantly more profit than in the corresponding quarter of the previous year.
  • In doing so, she clearly exceeded expectations.

According to the statement, UBS earned a total of 2.14 billion US dollars (around 2.3 billion francs) in the period from January to March 2022, around 17 percent more than in the already relatively good first quarter of 2021. Before taxes, it made a profit of 2.73 billion after 2.30 billion dollars (2.6 billion or 2.2 billion Swiss francs).

The estimates of analysts according to the AWP consensus were thus clearly exceeded or by around a quarter. According to UBS, it was the best quarter since the beginning of the financial crisis in 2007, in which UBS was known to have been particularly badly hit.

With income of $9.36 billion (+7.5%) and expenses of $6.63 billion (+3.5%), the cost/income ratio was 70.7 percent. This is 3.1 percentage points less than in the previous year, although this figure, which is important for banks, is expected to be in the range of 70 to 73 percent at UBS in the medium term.

Various uncertainty factors

CEO Ralph Hamers is satisfied in the statement given the various factors of uncertainty: “Our strong results show that we are able to achieve our goals even in such an environment.” In addition to the Russian invasion of Ukraine, the bank also cites the corona-related restrictions and lockdowns or the worsening economic prospects and concerns about the rise in inflation and the reactions of the central banks to them as negative factors.

UBS is cautious about the outlook


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UBS is cautious about the future. The big bank pointed to increased uncertainty about the sustainability and nature of the economic recovery and question marks about deglobalization and inflation. Investor sentiment became more cautious in the first quarter of 2022, the quarterly report said.

Russia’s invasion of Ukraine is impacting the global economy and markets, putting upward pressure on energy and commodity prices and heightening concerns about supply chain disruptions and the ongoing impact of the pandemic and related restrictions, particularly in the Asia- Pacific. In addition, high inflation worldwide and the tense situation on the labor markets in many countries have led to a more restrictive monetary policy, which is causing additional concerns for the market.

The further development of economic growth has thus become much more uncertain. Nevertheless, UBS assumes that economic activity will continue to increase, even if the increased uncertainty could continue to negatively affect the level of client activity and asset prices. However, rising interest rates, particularly in US dollars, would likely result in higher net interest income.

The result in the investment bank was significantly better than expected and compared to the previous year, while global asset management and thus the core business of the bank fell slightly short of expectations. The bank is talking about lower customer activity here, especially in Asia. In investment banking, the trading business was particularly strong, while the other areas slacked off somewhat.

More new funds

Assets under management also tended to decline significantly due to the price declines on the stock markets. Overall, the bank still managed $4,380 billion at the end of March – a good $200 billion less than at the end of 2021. However, new money flowed to it. In the core Global Wealth Management division, it was a net $19.4 billion in so-called fee-generating assets.

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