Zurich: Swiss banking giant UBS said on Tuesday its second quarter profits leapt 63 percent on the back of a strong performance by its wealth management division.
The net profit of $2 billion (1.7 billion euros) was well above the $1.4 billion forecast by Swiss agency AWP. Operating income, the equivalent of revenue, jumped 21 percent to $8.9 billion, UBS said in a statement.
Pre-tax profits on its wealth management business, the bank´s traditional pillar, surged 47 percent from the same period a year ago to $1.2 billion, driven by the good performance of the financial markets and an increase in commissions.
The division garnered a net influx of $25 billion in new money. Its investment bank also saw pre-tax profits rise 9 percent to $688 million. "The momentum is on our side. We have no intention of letting go," Chief Executive Ralph Hamers told analysts on a call, adding across each region the bank had recorded its highest profit levels in more than five years.
"You can expect us to continue to focus on growth on the wealth side, but on efficiency as well (as we) continue to invest." Hamers, in the top role since November, has set his sights on digitalisation to help win more business from the lower echelons of the world's well-off. UBS sees potential for a new online platform to pull in $30 billion in the next year after being launched in May 2020, Reuters reported in June. the platform continued to see inflows through the second quarter, as a further $0.5 billion since early June brought its invested assets up to $4.2 billion.
On Tuesday, UBS posted $25 billion in fresh fee-generating client inflows throughout wealth management, thanks in particular to strong growth in the United States, where it is seeing rising business with the ultra-rich. Combined with strong markets, that helped push invested assets in its global wealth management business up by 4% sequentially to $3.2 trillion.
Trading amongst its wealthy and ultra-wealthy clients also remained strong, helping Switzerland's biggest bank boost pre-tax profits by 47% in its flagship business, as higher lending also helped offset a drag from lower interest rates on its net interest income.
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