UBS profit beats estimates as Ermotti sees brighter outlook

by Myriam Balezou and Noele Illien

UBS Group AG posted higher than expected profit in the second quarter, and signaled that the prospect of cooling global trade tensions should support results as investor activity revives.

The Zurich-based bank said Wednesday that net income was $2.4 billion in the three months to June. Client inflows at the key wealth management unit reached $23 billion, in line with forecasts.

“Our client conversations and deal pipelines indicate a high level of readiness among investors and corporates to deploy capital, as conviction around the macro outlook strengthens,” the bank said in its outlook. 

As the biggest global wealth manager, UBS has been warning for months that uncertainty over US President Donald Trump’s tariff plans was keeping investors on the sidelines and clogging up deals. Signs that major trading partners including the European Union and Japan are coming to terms with the White House are dispelling some fears while unpredictability remains. 

“First of all we need to reach agreements, and then they need to see that there is a degree of predictability and stability in these agreements,” UBS Chief Executive Officer Sergio Ermotti said in an interview with Bloomberg Television’s Francine Lacqua in Zurich. 

UBS shares rose as much as 3.7% after the open in Zurich on Wednesday, trading at 31.21 Swiss francs ($38.794) at 9:11 a.m. 

UBS’s performance for the quarter was aided by results at the investment bank, in particular by a 20% boost in equities trading revenue that was in line with US peers. The result was also driven by technical factors, including a slight profit in the loss-making unit that winds down former Credit Suisse assets, and the release of provisions related to a legacy legal case.

Pre-tax profit at the wealth management unit was below estimates, with transaction-based income lower than expected. 

UBS is facing higher capital requirements at home of as much as $26 billion, as part of a government reform aimed at preventing another crisis like the collapse of Credit Suisse. The bank is fighting back against the changes, and has considered moving its headquarters abroad, Bloomberg has reported. 

UBS’s share price has been hit by the uncertainty around the Swiss capital reform, with the stock still trailing regional peers despite a recent recovery. The bank’s leadership is exploring ways to mitigate the impact as it continues to seek to convince the government that the rules should be softened. 

Deliberately making the bank smaller in order to lessen the need for capital was however “not an option” for UBS, Ermotti said. “Having a global diversified business is a strength for us and for Switzerland.” 

Earlier this month, UBS launched a previously-announced share buyback of as much as $2 billion for the second half of this year, bringing the total for this year to $3 billion. Capital returns for investors beyond this year are less certain, and the bank has said it will give an update with full-year results in early 2026.

“Overall a mixed set of results,” analysts at Citigroup Inc. including Andrew Coombs said in a note. “There is no update on capital return plans and it appears UBS’ lobbying efforts on recent Swiss capital proposals is set to continue, with the company reiterating that this creates an unlevel playing field versus international peers.”

Ermotti addressed a smoldering scandal in Switzerland over customer losses linked to derivatives products on the back of currency swings earlier this year. The matter affects “less than 200 clients” and “a handful of client advisers,” Ermotti said. The bank has made some compensation payments to customers. 

The matter has been addressed in the second quarter results and it “was not really a meaningful number,” Ermotti said. 

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