UBS' profit rose sharply in the second quarter, as the bank cut costs to shield from a revenue drop. Healthy showings from its private bank internationally as well as in the U.S. outshone investment banking and asset management.
The Zurich-based bank said second-quarter net profit rose nearly 14 percent to 1.17 billion Swiss francs, underpinned by profits from managing the money of wealthy clients.
UBS said it benefited from a disposal gain of 107 million francs, but also set back by 258 million francs on restructuring and another 22 million lost when translating foreign currencies back into Swiss francs.
The star of UBS' result is its private bank, which saw more activity from clients, sold more mandates, lent more, but also benefited from a hike in U.S. dollar interest rates and spending cuts. Profit rose 12 percent before taxes at the unit, which took in 7.5 billion francs in net new money from clients – a rate of 5.4 percent growth.
U.S. Outflows
Profit from UBS' investment bank was up sharply on the year, but slid from the previous quarter. The bank said it saw higher revenue from equities, which offset a fall in foreign exchange, rates and credit income, as clients traded less and market volatility fell.
UBS' American private bank, led by Tom Naratil, hiked profit by 26 percent after hitting a new record on recurring net fee income and net interest income. However, the unit suffered $6.4 billion in withdrawals that are typical for the quarter, in which U.S. taxes are due.
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