LONDON — UBS, Switzerland’s biggest bank, had a great start to 2017, boosting pre-tax profit by 42% in the first quarter of the year and beating analysts estimates.
But that was not enough to keep the bank from striking a dour tone in its investor outlook.
Profit rose to CHF 1.9 billion (£1.47 billion, $US1.91 billion), from CHF 1.4 billion in the same period in 2016.
“Our very strong results in the first quarter highlight the power and potential of our franchise,” CEO Sergio Ermotti said in the bank’s quarterly results statement.
“We will continue to manage our business with discipline, focusing on sustainable performance and long-term growth.”
But UBS also listed all the problems affecting the banking industry, from volatile global politics to low interest rates and the phasing in of tougher international capital rules.
Here is what UBS said (emphasis ours):
“Improved investor sentiment and enhanced confidence have not yet fully translated into a sustained increase in client activity levels.
“While the global recovery is likely to continue, macroeconomic uncertainty, geopolitical tensions and divisive politics pose risks that may affect client sentiment and transaction volumes.
“Low and negative interest rates, particularly in Switzerland and the eurozone, continue to present headwinds to net interest margins. These may be partially offset by the effect of higher US dollar interest rates and a further normalization of monetary policy.
“Implementing Switzerland’s new bank capital standards and the proposed further changes to the international regulatory framework for banks will result in increased capital requirements, interest and operating costs.”
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