UBS Q1 earnings 2025

Swiss large UBS on Wednesday beat backside line expectations amid sharp returns in funding banking whereas warning of the worldwide commerce affect of sweeping U.S. tariffs because it seeks to rein in steep share declines.

Web revenue attributable to shareholders hit $1.692 billion within the first quarter, in contrast with a imply forecast of $1.359 billion in a LSEG ballot of analysts. Group income over the stretch stood at $12.557 billion, versus analyst expectations of $12.99 billion.

Different first-quarter highlights included:

• Return on tangible fairness reached 8.5%, versus 3.9% within the fourth quarter.
• CET 1 capital ratio, a measure of financial institution solvency, was 14.3%, unchanged from the December quarter.

The lender mentioned it delivered a 32% year-on-year hike in revenues of the worldwide markets unit of its funding banking arm, largely pushed by “greater shopper exercise in equities and FX with features throughout all areas.” It additionally achieved a 15% hike in transaction-based hike in revenue in its key international wealth administration unit.

Talking to CNBC’s Carolin Roth on Wednesday, UBS CEO Sergio Ermotti acknowledged a “difficult atmosphere” within the first quarter, with a spate of “positively extraordinarily risky” first few weeks in April that underpinned spikes within the quantity of transactions that at occasions exceeded Covid-19 ranges by 30%.

Critically, the lender posted $1.629 billion in its web curiosity revenue (NII) — the distinction between earnings from loans and investments and the funds on deposits —  down 16% year-on-year and 11% from the fourth quarter, guiding for additional declines within the June quarter.

“Within the second quarter we anticipate web curiosity revenue (NII) in World Wealth Administration to say no sequentially by a low single-digit proportion, and we see an identical decline in Private & Company Banking’s NII in Swiss francs. In US greenback phrases, Private & Company Banking’s NII is anticipated to extend sequentially by a mid-single-digit proportion, primarily based on present overseas change charges,” UBS mentioned.

Traders are keenly watching these metrics as European banks transition to an atmosphere of financial easing, significantly in Switzerland, which has been combating a robust franc and depressed inflation with rates of interest as little as 0.25%.

Ermotti mentioned he’s “not overly involved” about rate of interest actions.

“I believe that we at the moment are in a state of affairs the place it is virtually like a impartial, pretty boring zone,” he famous. “If charges go up or down from right here in Swiss francs, then we will see a possible choose up in NII. But it surely’s untimely to speak about if and when this can materialize.”

Individually, UBS on Wednesday confirmed it had accomplished $500 million in share buybacks and meant to press forward with a $2.5 billion repurchase plan for the rest of 2025.

“General a good set of outcomes, albeit boosted by non-core features and heightened buying and selling exercise in each IB and GWM, all of which might not be sustainable, whereas NII has missed expectations once more,” Citi analysts mentioned in a Wednesday be aware after UBS reported.

The lender’s shares had been up 1.64% at 08:30 a.m. London time.

Deposed this month as continental Europe’s largest financial institution by market capitalization by Banco Santander, UBS has suffered share declines of roughly 10% within the 12 months thus far, with the brunt of losses logged after the White Home’s imposition of tariffs on international commerce companions on April 2.

Switzerland faces a 31% responsibility if it fails to agree a extra conciliatory commerce deal by the top of Washington’s 90-day reprieve in early July. Comparatively, the European Union was hit with 20% in U.S. levies.

Tensions with Washington and a possible recessionary outlook for the world’s largest economic system spell bother for the Swiss banking large and its money-spinning international wealth administration division, with round half of UBS’ invested belongings concentrated within the broader Americas area final 12 months.

“Speedy and important adjustments to commerce tariffs, heightened threat of escalation and considerably elevated macroeconomic uncertainty led to main market volatility within the first weeks of April,” UBS mentioned Wednesday. “With a variety of attainable outcomes, the financial path ahead is especially unpredictable. The prospect of upper tariffs on international commerce presents a fabric threat to international development and inflation, clouding the rate of interest outlook.”

It flagged the potential for “additional spikes in volatility” as markets stay delicate to new tariffs-led developments, noting that “Extended uncertainty would have an effect on sentiment and trigger companies and buyers to delay vital selections on technique, capital allocation and investments.”

“You have a look at the final 10 days or so, I believe there’s a little little bit of fatigue coming in. I believe that buyers at the moment are ready in a wait-and-see mode. Markets have settled down … persons are ready for important information,” UBS’ Ermotti instructed CNBC. “However I do anticipate spikes of volatilities to come back again as constructive or unfavorable information unfold.”

The image of UBS’ long-term profitability stays darkened by questions over potential new — and extra draconian — capital necessities from Swiss authorities, which have questioned the Swiss titan’s “too massive to fail” standing since its absorption of collapsed home rival Credit score Suisse. The transaction — which one politician on the time dubbed the “deal of the century” — has propelled UBS down the trail of most resistance in opposition to additional restrictions, which it argues would undermine its competitiveness as an already adequately capitalized entity.

“UBS’s lobbying is each seen and unmistakable. It is clearly resonating in varied locations. However as soon as once more: the Federal Council can’t be intimidated by lobbying, however should additionally characterize the pursuits of taxpayers,” Swiss President Karin Keller-Sutter instructed broadcaster SRF final month, in keeping with a Google translation.

“The Federal Council has one objective: that within the occasion of a disaster, a UBS that’s systemically vital is resolvable. Which means that the systemically vital components of the financial institution could be separated in Switzerland. That should be the objective of the Federal Council and the brand new laws.”

UBS is anticipated to interact with the Swiss Federal Council over any proposed capital requirement adjustments in June.

Talking about UBS’ odds of competitiveness within the broader Swiss regulatory atmosphere, Ermotti mentioned, “We aren’t magicians. We aren’t going to have the ability to be aggressive and supply and be an engine of development for the monetary heart, but additionally for the economic system, if the regulatory framework will not be aggressive.”