Net income fell to 707 million Swiss francs ($741 million) from 1.98 billion francs a year earlier, the Zurich-based bank said on Tuesday.
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The bank’s Wealth Management Americas unit hauled in 13.6 billion francs in net new money, UBS said, as it capitalized on the recent USA pullout of Swiss rival Credit Suisse Group AG’s wealth management operation.
UBS Wealth Management Americas – mainly, the Swiss bank’s US brokerage – unit brought in $14.37 billion of net new money in the first quarter, according to the Journal, which attributes the growth in part to the company taking business left by its rival Credit Suisse withdrawing from the USA wealth market.
But UBS chief executive Sergio Ermotti insisted the bank had performed well despite the difficulties.
Europe’s big banks have struggled with turbulent markets, new regulations aimed at preventing another financial crisis, and low or negative interest rates imposed by central banks.
Nevertheless, UBS struck a cautious tone, saying “underlying macroeconomic challenges and geopolitical risks” were making its clients risk averse and this was unlikely to change soon.
An unexpected positive in the results was the 29 billion francs in net new money from UBS’s two private banking businesses, the highest such figure for a first quarter since 2008 and well above a poll forecast.
In addition, it said low interest rates, and the relative strength of the Swiss franc, particularly against the euro, continue to present headwinds.
“UBS continues to execute its strategy with discipline to mitigate these effects and is well positioned to benefit from even a moderate improvement in conditions”, UBS said.
“We suspect that UBS” performance will be among the better of the banks and the strong capital and excellent net new money flow probably still give the shares some “safe haven’ status within the sector”, Baader Helvea analyst Tim Dawson said in a research note.
UBS’s results also follow a series of downbeat first-quarter reports from USA investment banks.
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UBS also said it had made 1.2 billion francs in cost savings by March 2016 since 2013, leaving it was on track to achieve its targeted savings of 2.1 billion francs by the end of 2017.
