UBS shares are higher Tuesday, as the Swiss bank’s Q2 earnings update impresses investors. Net profits rose strongly and anticipated US rate increases this year should also bode well for the business. The company outlook for the remainder for 2018 is also for a continued solid performance.
By 1310 BST, UBS shares were 2.94% higher at CHF15.74. The stock has been mixed in recent weeks.
UBS Q2 earnings
The Swiss bank said Tuesday, that total net profits in the second quarter of 2018 grew 9% to CHF1.3 billion.
UBS’ pre-tax profit for its Global Wealth Management arm rose 18% in Q2 from a year earlier. And, pre-tax profits at its and Investment Bank arm, increased 26% compared with the second quarter of 2019.
The bank also confirmed the repurchase of CHF550 million of its own shares, while it was able to maintain a strong CET1 capital ratio of 13.4% and CET1 leverage ratio of 3.75%.
“I'm pleased with the second quarter, which contributed to a strong first half, with particularly good capital generation,” said UBS group chief officer, Sergio P. Ermotti. “We'll keep our focus on growth and efficiency and continue to build on the strengths of our global franchise.”
Swiss bank shares positive outlook
As well as the positive Q2 performance, UBS also shared an upbeat outlook for the remainder of 2018.
The Swiss bank said that right now, the economic backdrop remains supportive of global stock markets and the UBS business. However, it noted that investor confidence had waned a little in recent weeks, amid global geopolitical tensions and trade disagreements.
“We continue to expect US dollar interest rates to rise gradually, which, despite margin pressure, is likely to support net interest income in Global Wealth Management,” the Swiss bank said.
Overall, it anticipates achieving all its previous laid out financial and strategic targets for 2018.