The collapse of the Archegos hedge fund had only a minor effect on UBS’ investment bank in the second quarter.
UBS’ Investment Bank division’s operating profit rose 9 percent on the year to $668 million in the second quarter, the bank said in its results statement Tuesday.
There was no mention of Archegos in the report. Earlier UBS forecast a loss of $87 million in the second quarter of after a loss of $774 million in the first.
Both income and expenditure at the Investment Bank rose 9 percent to $2.47 billion and $1.80 billion, respectively.
The bank said the rise in income reflected higher revenues in the Global Banking unit and net credit loss releases, offset by lower revenues in the trading unit, Global Markets.
Forex, Fixed-income Revenues Fall
Global Markets revenues from foreign exchange, rates and credit revenues fell 56 percent to $373 million, compared with strong revenues in the second quarter of 2020. Spread compression and lower foreign exchange volatility hit foreign exchange revenues in the second quarter.
This was partly offset by revenues in revenues from equities growing 23 percent, to $1.194 billion, mostly driven by increases in equity derivatives and cash equities products.
Global Wealth Management
At the bank’s key Global Wealth Management division the operating profit leaped 47 percent to $1.29 billion.
The rise was mainly driven by higher recurring net fee and transaction-based income, as well as net credit loss releases compared with net credit loss expense a year earlier. Recurring net fee income increased 30 percent to $2.774 billion, primarily driven by higher average fee-generating assets, reflecting bullish markets and higher net new fee-generating assets.
Transaction-based income grew 16% to $953 million, driven by high levels of client activity in a constructive market environment, the bank said.
Assets under management by the GWM division grew 4 percent on the year to $3.23 trillion as of June 30, with net new inflows of $25 billion.
