UBS extends winning streak in second quarter as wealth management business booms

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Logo of Swiss bank UBS is seen in Zurich
FILE PHOTO: The logo of Swiss bank UBS is seen at a branch office in Zurich, Switzerland June 22, 2020. REUTERS/Arnd Wiegmann

July 20, 2021

By Brenna Hughes Neghaiwi

ZURICH (Reuters) – Swiss bank UBS on Tuesday posted a 62.8% rise in second-quarter net profit, as buoyant markets continued to help the world’s largest wealth manager generate higher earnings from managing money for the rich.

Second-quarter net profit of $2.01 billion, up from $1.23 billion in the same quarter a year ago, far outpaced expectations for $1.34 billion in a poll of 20 analysts compiled by the bank.

“Our growth in the second quarter was underpinned by the relationships we have built and strengthened throughout the pandemic,” Chief Executive Ralph Hamers said in a statement, adding all business divisions and regions had contributed to the rise.

“Momentum is on our side and our strategic choices and initiatives are paying off.”

Hamers, in the top role since November, has set his sights on digitalisation to help win more business from the lower echelons of the world’s well-off.

UBS is trying to improve its digital services to reach more customers outside its super-rich core client base. It sees potential for a new online platform to pull in $30 billion in the next year after being launched in May 2020, Reuters reported in June.

On Tuesday, UBS posted $25 billion in fresh fee-generating client inflows. Combined with strong markets, that helped push invested assets in its global wealth management business up by 4% sequentially to $3.2 trillion.

Trading amongst its wealthy and ultra-wealthy clients also remained strong, helping Switzerland’s biggest bank boost pre-tax profits by 47% in its flagship business, as higher lending also helped offset a drag from lower interest rates on its net interest income.

(Reporting by Brenna Hughes Neghaiwi; Editing by Kenneth Maxwell)