Swiss bank UBS (NYSE:UBS) reported net income of $1.8 billion U.S. for the first quarter of 2021, up 14% from a year earlier despite taking a hit from the scandal involving hedge fund Archegos Capital.
UBS shares were down 2% in European trading after reporting its latest earnings results.
The lender said its revenue in the first quarter was $774 million U.S. lower as a result of the default of the Archegos hedge fund, which collapsed in March after taking on too much debt. The U.S.-based family office was a client of UBS’ prime brokerage business.
UBS said it had exited all exposure to Archegos and any related losses in the second quarter of this year would be "immaterial" to the bank.
UBS’ net income in the first quarter represented a 14% increase from a year earlier. Analysts had expected the figure to come in at $1.6 billion U.S., according to data from Refinitiv.
Other highlights from the bank’s financial results include:
Operating income reached $8.7 billion U.S. from $7.9 billion U.S. a year ago and operating expenses of $6.4 billion U.S. compared to $5.9 billion U.S. Going forward, UBS said that revenues in the second quarter will be affected by "seasonal factors" such as lower client activity compared to the first three months of the year.
The Swiss bank expects a positive impact from higher asset prices but warned that there is "continued uncertainty" about the global economic recovery, which could impact future earnings.
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