UBS 2Q15 net profit up 53%
(29 July 2015 – Switzerland) UBS delivered a robust second-quarter adjusted profit before tax of 1,635 million Swiss francs (A$2335 million) despite continued market and economic uncertainty, which it attributed to its fundamental earnings power and the strength of its business model.
Net profit attributable to UBS Group AG shareholders was 1,209 million Swiss francs, up 53 percent compared with the second quarter of 2014.
“I am pleased with the quarter. We maintained our momentum despite ongoing market challenges, and establishing UBS Switzerland AG was another major milestone in enhancing resolvability,” said Group chief executive Sergio Ermotti.
“We remain focused on building on our early mover advantage with a clear strategy, while increasing effectiveness and efficiency, and further investing for profitable growth.”
UBS Wealth Management delivered its best second-quarter result since 2009, with an adjusted profit before tax of 769 million Swiss francs and robust net new money of 8.4 billion Swiss francs excluding the effects of its balance sheet and capital optimization program.
On a reported basis, net new money was 1.8 billion Swiss francs.
Wealth Management Americas posted an adjusted profit before tax of US$231 million (A$317 million) with operating income and financial advisor productivity at record levels.
Retail and Corporate had its best second quarter since 2010, with an adjusted profit before tax of 414 million Swiss francs showing strong net new business volume growth for retail clients.
Global Asset Management reported an adjusted1 profit before tax of 134 million Swiss francs and strong net new money of 8.3 billion Swiss francs, excluding money market flows.
The Investment Bank reported an adjusted profit before tax of 617 million Swiss francs with the best second-quarter result in Equities since 2012.
It achieved an adjusted return on attributed equity of 33.8 percent without increasing its risk profile.
Overall, UBS said its second quarter again demonstrated the resilience and diversification of its earnings, the strength of its business model, and the benefits of a strategy defined early and executed with discipline.
Group adjusted profit before tax was 1,635 million Swiss francs, with positive contributions from all divisions and regions.
Adjusted annualized return on tangible equity for the first six months of 2015 was 12.0 percent, above the 2015 target of around 10 percent.
The bank strengthened its leading capital position, with a fully applied Basel III CET1 capital ratio of 14.4 percent at the end of June, above the target of at least 13.0 percent and ahead of all other large global banks.
Its fully applied Swiss Systemically Relevant Banks (SRB) leverage ratio rose to 4.7 percent in the second quarter, as the Swiss SRB leverage ratio denominator (LRD, fully applied) decreased by 33 billion Swiss francs, partly reflecting a substantial reduction in Non-core and Legacy Portfolio assets.
Since the third quarter of 2012, UBS has reduced the Non-core and Legacy Portfolio LRD from 293 billion Swiss francs to 70 billion Swiss francs.
The creation of UBS Group AG and UBS Switzerland AG were major milestones to improve the Group's resolvability, in response to the evolving regulatory environment.
In June, some 2.7 million clients and approximately 300 billion Swiss francs in assets, primarily from the Swiss Retail & Corporate and Wealth Management businesses, were transferred into UBS Switzerland AG.
UBS is the first bank to complete this step in Switzerland.
UBS has also implemented a more self-sufficient business and operating model for UBS Limited in the United Kingdom, and has submitted plans for the establishment of an intermediate holding company in the United States.
In the third quarter, UBS will establish a Group service company as a subsidiary of UBS Group AG, into which shared services and support functions of the Group will be transferred over the next several years.
This will help ensure the bank can maintain the operational continuity of these critical services in case of resolution.
All these measures will allow UBS to qualify for a rebate on the progressive buffer capital requirement applicable to Swiss systemically relevant banks, which should result in lower overall regulatory capital requirements for the Group.
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