Sergio Ermotti, chief govt officer of UBS Group
Stefan Wermuth | Bloomberg | Getty Pictures
UBS introduced a web revenue of $1.23 billion for the second quarter of 2020, down 11% from the identical interval final yr ($1.four billion) because the coronavirus pandemic weighed on earnings.
Analysts polled by the financial institution had anticipated a web revenue of $973 million for the quarter.
The Swiss lender had reported a web revenue attributable to shareholders of $1.6 billion for the earlier quarter, as monetary market volatility enabled the working income of the Swiss funding financial institution to surge. Nonetheless, it had warned of an unsure future within the coming quarters because the pandemic started to unfold all through the world, ultimately bringing the worldwide financial system to a standstill.
Greater buying and selling exercise continued to bolster the financial institution’s earnings within the interval, however was unable to offset the pandemic-induced downturn in its retail and company banking models.
Listed here are the highlights from the second-quarter earnings report:
- Working revenue hit $7.four billion, versus $7.5 billion a yr in the past.
- Return on tangible fairness stood at 9.6%, versus 11.9% a yr in the past.
- Widespread fairness tier 1 capital ratio of 13.3%, versus 13.3% a yr in the past.
The outcomes included credit score loss bills of $272 million, of which $110 million got here in private and company banking and $78 million within the funding financial institution.
In its outlook, the financial institution warned that continued group credit score losses could possibly be anticipated within the second half of the yr as a result of coronavirus pandemic, however mentioned these can be beneath these seen within the first half.
UBS additionally mentioned it was reviewing the combo between money dividends and share buybacks in gentle of the elevated uncertainty surrounding the Covid-19 pandemic.
“Whereas it’s untimely to offer steering for 2020, going ahead the intention is to proceed to pay out extra capital and keep the general capital returns to shareholders according to earlier ranges,” the financial institution mentioned in its earnings report, including that share repurchases might proceed within the fourth quarter relying on enterprise improvement and the second-half outlook.
In an announcement Tuesday, UBS CEO Sergio Ermotti mentioned: “As we proceed to face a difficult surroundings, we’re adapting and accelerating the tempo of change, supporting our shoppers, workers, and the economies during which we function, whereas remaining centered on our strategic priorities.” Ermotti will probably be changed on the helm by ING CEO Ralph Hamers on November 1 this yr.