Swiss bank UBS (UBS) has reported a $3 billion U.S. net profit, up 80% from a year earlier.
The profit posted by UBS surpassed the $2.8 billion U.S. consensus estimate of analysts. News of the profit surge has sent UBS’ New York-listed shares up more than 5% on April 29.
The big profit was attributed to the Zurich-based bank’s global wealth management business, which boasted net new assets of $37 billion U.S. by the end of the quarter, a 3.1% increase.
Switzerland’s government recently unveiled plans to prevent another Credit Suisse-style banking collapse, which would require UBS to hold around $20 billion U.S. in extra capital.
As a result, the Swiss banking giant’s common equity tier 1 capital ratio, a measure of its solvency, increased to 14.7% during the quarter, up from 14.4% the previous quarter.
In its earnings release, UBS said it is on track to buyback $3 billion U.S. of shares ahead in the current second quarter, having repurchased $900 million U.S. of stock in the first quarter.
In terms of guidance, UBS said risks remain elevated because of the Iran war. As such, second quarter net interest income is expected to be flat year-over-year.
However, management stressed that they do not see any major issues in the private credit space, with only “a few funds under stress.”
Prior to today (April 29), UBS’ stock had declined 11% this year to trade at $42.10 U.S. per share.
