UBS, EuropeÃÂ´s third-biggest bank, on Wednesday warned that revenues could 'dip' over the remainder of the year after reporting a robust 23 per cent rise in second-quarter profits. Strong performance at the bankÃÂ´s investment and trading division helped lift net profits in the three months to June 30 to SFr1.64bn compared with SFr1.33bn a year ago.
Peter Wuffli, chief executive, put the bankÃÂ´s strong second quarter down to 'a gradual recovery of market activity and investor sentiment'. But he said his optimism was 'tinged with caution'.
'Investors remain concerned about future economic prospects and confidence in the financial markets has not yet been fully restored,' he added. The bank also said it would not be surprised if revenues fell in the coming months, given the 'seasonal patterns in capital market activity'.
Investment banks in Europe and the US have been supported by strong fixed-income trading operations during the downturn in equity markets and corporate activity. However, many banks are thought likely to be hit by greater volatility in bond markets in the current quarter.
The banking and securities business reported a 14 per cent quarter-on-quarter rise in pre-tax profit to SFr1.07bn, on the back of improved trading conditions. UBS also said its investment banking business had recovered from its lows of the first quarter, with a 55 per cent rise in revenues. Earnings per share rose 24 per cent to SFr1.65, compared with same quarter last year.
Source: Financial Times