Net profits for Swiss Bank UBS rose more than 50 per cent in the second quarter, beating expectations but not impressing investors, who hoped to see results similar to what rival Credit Suisse reported last week.
UBS shares fell around one per cent on Monday morning (July 27th) despite its quarterly net profits reaching 1.2 billion francs (£810 million). Analysts had expected profits to reach just 996 million francs and the company earned 792 million francs in the same period last year.
Last week, Credit Suisse reported a surge of almost eight per cent after it announced profits of 1.05 billion francs compared to the expected 650 million francs.
Analyst Omar Fall explained that USB's results were a "mixed bag" in terms of quality. "The issue is the 'whisper number' [informal expectations of results] would have increased following Credit Suisse's blowout results and US banks reporting," he added.
Other measures also indicated that USB is remaining strong, despite comparisons to its rival. For example, its common equity tier one ratio was 14.4 per cent at the end of June, compared to an expected 13.9 per cent.
Chief executive at UBS, Sergio Ermotti, commented that the bank's dividend policy remains unchanged and he told reporters that the bank was conserving capital in order to deal with future regulatory requirements, as well as changes in capital needs at certain points of the business cycle.
"We are not obsessed with going out and grabbing assets just for the sake of increasing our asset base," he explained. "We were doing exactly the opposite, we are focusing on the quality of assets".
UBS also reported that investment banking revenues were the highest since the bank implemented a strategy in 2012 to reshape the unit and focus the group around wealth management.
Equities was the strongest performer and saw revenues go up 30 per cent compared to the same period last year. Fixed income, rates and currency saw revenue increase four per cent for the year. However, client activity was lower in credit.