UBS Q2 Earnings Beats: Wealth Management Shines, Cost Savings Accelerate & More

UBS Group AG UBS shares are trading higher after it reported second-quarter FY24 sales of $11.9 billion, up 25% Y/Y, beating the consensus of $11.3 billion.

Underlying operating profit before tax reached $2.06 billion, significantly higher than $891 million a year ago.

Global Wealth Management’s net new assets for the second quarter were $26.9 billion, with revenues increasing 15% Y/Y to $6.05 billion.

The group posted a net profit attributable to shareholders of $1.14 billion for the quarter, which declined from $27.3 billion a year ago. EPS of $0.34 beat the consensus of $0.12.

CET1 capital ratio, a measure of bank liquidity, was 14.9%, compared to 14.8% the previous quarter and 14.1% a year ago.

CEO Sergio Ermotti said, “Our first-half results reflect the significant progress we have made since the closing of the acquisition as we deliver on all of our commitments to stakeholders. We are well positioned to meet our financial targets and return to the levels of profitability we delivered before being asked to step in and stabilize Credit Suisse.”

“We are now entering the next phase of our integration, which will be critical to realize further substantial cost, capital, funding and tax benefits. As we execute on our plans, we will continue to invest to position UBS for sustainable growth while staying close to clients, providing even better outcomes for them and the communities where we live and work.”

The company achieved additional gross cost savings of $0.9 billion, for a total of about $6 billion in annualized exit rate gross cost savings vs. FY22 combined. 

UBS now anticipates achieving around $7 billion in gross cost savings by the end of 2024, which is about 55% of its goal of roughly $13 billion by the end of 2026.

UBS completed its merger with Credit Suisse and key structural changes in mid-2024. Client migration to UBS platforms will start in the fourth quarter of 2024, with major benefits expected by the end of 2026.

Read: UBS Wealth Management Role Split In Executive Board Reshuffle

Outlook: In the third quarter of 2024, UBS anticipates integration-related expenses of approximately $1.1 billion. While the rate of gross cost savings is expected to modestly decline sequentially, these expenses should be partly offset by about $0.6 billion from purchase accounting effects.

For H2 2024, the bank projects that non-core and legacy units will face a $1 billion pre-tax loss and revenue to see modest gains, and sequential cost improvement.

According to Benzinga Pro, UBS has gained around 25% in the last 12 months. Investors can gain exposure to the stock via Avantis International Equity ETF AVDE and American Century ETF Trust Avantis Responsible International Equity ETF AVSD.

Also Read: UBS Sells Stake In China Joint Venture To Comply with Local Regulations: Report

Price Action: UBS shares are up 2.53% at $29.99 premarket at the last check Wednesday.

Disclaimer: This content was partially produced with the help of AI tools and was reviewed and published by Benzinga editors.

Photo via Shutterstock

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