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UBS earnings Q2 2019



UBS announced net income of $ 1.4 billion for the second quarter of 2019, compared to net income of $ 1.28 billion ($ 1.29 billion) in the second quarter of 2018.

The Swiss lender announced this. This is the highest net profit in the second quarter since 2010. The increase in profits has been recorded, although there was a decline in both the investment banking and wealth management sectors of $ bn compared to 7.6 bn Return on equity amounted to 11.9% compared to 12% in the previous year

  • Core capital ratio of 13.3% compared to 13.4% in the previous year
  • "We saw a normalization I would say the highlights were clear: diversification has returned, "said Sergio Ermotti, CEO of UBS, to Joumanna Bercetche of CNBC.

    UBS shares hovered around the flatline shortly after the market open.

    Global Wealth Management Declines

    UBS, however, saw a decline in its global asset management business compared to the previous year. The bank achieved operating income of $ 886 million, compared to over $ 1

    billion in the second quarter of 2018.

    Investment bank profits also declined year on year. It reported operating income of $ 440 million for the second quarter, compared to $ 571 million a year earlier.

    Ermotti told CNBC, "The turnaround in the US interest rate environment has created pressure."

    Market expectations point to an interest rate cut by the Federal Reserve later this month. The central bank had followed a normalization path in 2015 following the global and sovereign debt crisis. However, according to recent data, US economic conditions have deteriorated.

    In Europe, the outlook for monetary policy is similar. The European Central Bank (ECB) said in May that the central bank will be ready to announce further incentives if in-depth economic data does not improve.

    Ermotti told CNBC that he was not sure if further easing would boost the economy. "I am not sure if I should go deeper into negative territory or use QE (Quantitative Easing) to get out of the problems, we need more structural answers," he said.

    Ermotti warned that "there are strict considerations in a broader sense than just the banking industry" of low interest rates.

    Outlook

    Mr Ermotti's comments come in after his recent findings warned the Swiss lender that a return to monetary stimulus from various central banks could undermine profits in the future. "A sharp decline in interest rates and expected interest rate cuts will continue to negatively impact net interest income year-on-year," said UBS.

    However, the Swiss bank expects diversified business, stronger investor sentiment and higher market volatility UBS announced in the previous quarter that it would reduce the 2019 cost by a further $ 300 million after expecting declining revenues.

    "We're always looking at structural and tactical issues, and the 300 million were pretty tactical, we're always thinking about how to optimize our cost base, but we're also investing in the future," Ermotti said Tuesday.


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