SWISS bank UBS recorded unexpectedly large profits in the first quarter of the year as cash flooded into the private banking arm at post-crisis record levels, according to financial results published yesterday.
The bank is going through a radical shake up, cutting down its investment banking arm and playing to its traditional strengths across wealth management services.
But the strategy has paid off more rapidly than analysts had dared hope.
Profits came in at SFr988m (£683.5m) for the quarter, down a touch from the SFr1.04bn recorded in the same period last year but above expectations.
Operating income jumped 19.2 per cent on the year to SFr7.78bn while costs increased 27.7 per cent to SFr3.33bn.
Return on equity held steady at 8.5 per cent while headcount fell 3.8 per cent on the same period of 2012 to 61,782, largely in investment banking.
The wealth management unit recorded net inflows of SFr15bn – the highest quarterly increase in new client money since 2007.
“The results were better than expected in every division except retail and corporate,” said banking analyst Kian Abouhossein from JP Morgan.
“Wealth management in particular was pleasing, but the main positive came from the investment bank at SFr924m versus consensus SFr331m.”
The bank’s shares jumped 5.67 per cent on the day.