The company said that net profit rose to 2.07 billion francs as compared to a reading of 1.32 billion francs reported by the company during the same period a year ago. It now expects to post an adjusted return on tangible equity of more than 15% by 2018.
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However, this was mainly aided by a huge Swiss franc 1.295 billion (£851 million, $1.31 billion) tax gain and offset on the other side of the balance sheet by Swiss franc 592 million (£389 million, $600 million) worth of net charges for provisions for litigation, regulatory and similar matters.
Chief financial officer Tom Naratil said: “Our teams in the investment bank achieved good productivity in the quarter despite the extraordinary market volatility”, as the unit cut its cost-to-income ratio to 70pc, which is at the bottom end of its target range.
“Today’s results will be viewed slightly negatively”, said Brun, the Zuercher Kantonalbank analyst.
Alongside earnings, UBS also announced a reshuffle of its top management Tuesday.
“Disciplined execution and our diversified business model allowed us to deliver strong results”, chief executive officer Sergio Ermotti said in the statement. Current wealth management finance chief Kirt Gardner will become group CFO.
Unadjusted for withdrawals of cash that UBS views as unprofitable, net new money excluding its Americas business was 200 million francs, its lowest quarterly haul since late 2010. UBS’s previous slashing of the size of its investment bank has won praise from analysts and investors. The bank disclosed Tuesday that it is one of eight financial firms being investigated by authorities over alleged corruption at world soccer’s governing body, FIFA, according to the Wall Street Journal.
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Several banks, including Zurich-based Julius Baer, started internal investigations after the US Justice Department named them in the May indictment.
