UBS It exceeded expectations for the primary quarter of 2022 and mentioned it had additional lowered its exposure to Russia.
Swiss banks reported on Tuesday that web earnings attributable to shareholders was $ 2.136 billion. This is above the $ 1.79 billion forecast that banks have put collectively.
This was a 17% enhance from the $ 1.82 reported in the identical interval in 2021, after the year-end quarterly web earnings fell to $ 1.35 billion.
Banks beforehand described their exposure to market threat to Russia as “restricted” and mentioned on Tuesday that they’d lowered their exposure from $ 600 million on the finish of 2021 to $ 400 million as of March 31.
He added that he has no vital exposure to Ukraine or Belarus and isn’t doing any new enterprise with Russia or Russia-based clients.
“Macroeconomics, geopolitics and market elements led to Russia’s invasion of Ukraine, COVID-related rules and lockdowns, rising volatility, decrease financial development prospects, rising inflation and financial coverage within the first quarter. There was a excessive stage of uncertainty, together with issues in regards to the response. “
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“The world is fairly unpredictable,” UBS CEO Ralph Hammers informed CNBC’s Jeff Cutmore on Tuesday.
Other key indicators for the quarter are:
- Operating revenue was $ 9.36 billion, in contrast with $ 8.71 billion within the earlier yr.
- Return on tangible fairness, an indicator of profitability, rose from 14% within the earlier yr to 16%.
- The CET1 ratio, a measure of a financial institution’s solvency, was 14.3%, in comparison with 15% on the finish of 2021.
The firm’s inventory traded nearly 2% greater shortly after the market opened in Europe.
The ECB is “just a little late”
An essential horizon uncertainty is how central banks react to greater inflation, which may have a direct influence on financial institution efficiency.
“The ECB is [U.S. Federal Reserve] The Fed is forward of the ECB. not solely, [it’s] Let’s be trustworthy, just a little late. Therefore, the ECB can be just a little behind. Because they … do not wish to be sooner than the Federal Reserve, “Hammars informed CNBC.
The European Central Bank Announced that it’s going to finish its asset buy program in June, however has not but supplied an correct schedule for when rates of interest could rise.
“The ECB expects rates of interest to rise first in the direction of the top of the yr,” Hammers mentioned.
Another query dealing with the European financial system is whether or not the battle in Ukraine will drag it into recession. European leaders are imposing strict sanctions on Russia and are contemplating additional steps to punish the Kremlin, together with the potential for a ban on oil imports.
When requested if oil and gasoline sanctions on Russia may pose a threat to Europe, Hammers mentioned:[s] Much of the trade depends on gasoline as the essential commodity for manufacturing merchandise … so it will probably have secondary penalties, particularly within the European financial system. “
