UBS Group posted higher than expected profit in the second quarter, and signalled that the prospect of cooling global trade tensions should support results as investor activity revives.
The Zurich-based bank said net income was US$2.4 billion in the three months to June, compared with estimates for US$2.2 billion. Client inflows at the key wealth management unit reached US$23 billion, in line with forecasts.
“Our client conversations and deal pipelines indicate a high level of readiness among investors and corporates to deploy capital, as conviction around the macro outlook strengthens,” the bank said in its outlook.
As the biggest global wealth manager, UBS has been warning for months that uncertainty over US President Donald Trump’s tariff plans was keeping investors on the sidelines and clogging up deals. Signs that major trading partners including the European Union and Japan are coming to terms with the White House are dispelling some fears while unpredictability remains.
UBS’s out-performance for the quarter was driven substantially by technical factors, including a slight profit in the loss-making unit that winds down former Credit Suisse assets, and the release of provisions related to a legacy legal case.
Pre-tax profit at the wealth management unit was below estimates, while the investment bank performed broadly as expected, supported by trading.
See also: Great Eastern at 5-year high on trading resumption on Aug 21
UBS is facing higher capital requirements at home of as much as US$26 billion, as part of a government reform aimed at preventing another crisis like the collapse of Credit Suisse. The bank is fighting back against the changes, and has considered moving its headquarters abroad, Bloomberg has reported.
UBS’s share price has been hit by the uncertainty around the Swiss capital reform, with the stock still trailing regional peers despite a recent recovery. The bank’s leadership is exploring ways to mitigate the impact as it continues to seek to convince the government that the rules should be softened.
Earlier this month, UBS launched a previously-announced share buyback of as much as US$2 billion for the second half of this year, bringing the total for this year to US$3 billion. Capital returns for investors beyond this year are less certain, and the bank has said it will give an update with full-year results in early 2026.
UBS is seeking ways to cut riskier businesses amid the tougher regulation. The bank agreed in May to sell its hedge fund unit O’Connor to Cantor Fitzgerald LP.
