UBS’s first quarter 2020 reflected high client transaction volumes in Global Wealth Management and the Investment Bank. Operating income grew by 10% despite a rise in credit loss expenses, and operating expenses increased by 4%.
Profit before tax (PBT) was $2 billion, up 30% year over year (YoY), while the Group’s cost/income ratio improved 6 percentage points to 72.3%. Net profit attributable to shareholders was $1.59 billion, up 40% YoY. Return on CET1 capital (RoCET1) was 17.7%. The results were driven by strong performances across all businesses, and without the help of special items.
Global Wealth Management PBT was $1.2 billion, up 41% YoY on excellent operating income reflecting client activity and progress on strategic levers; double-digit PBT growth in all regions. Personal & Corporate Banking PBT was $334 million, down 14% YoY, reflecting credit loss expenses (CLE) that offset solid operating performance. Asset Management (AM) PBT was up 52% YoY to $157 million, with 11% positive operating leverage and very strong net inflows.
UBS is fully committed to playing its part in mitigating the effects of the Covid-19 crisis, supporting employees, clients and communities. Agnès Falco, CEO UBS Monaco, says, “From day one, our key priorities have been to safeguard the wellbeing of our employees, serve our clients and ensure operational continuity in the current situation.”
Falco, who was the first woman, and the youngest person, to be named CEO in Monaco with Credit Suisse in 2015, says, “From a financial perspective, we’ve relied on our strong Capital Strength, on our systems and on our people to prevent potential fraud. But, being a leading Wealth Manager during this period requires more: we’ve used all our resources to care and support individuals, clients, businesses and communities.”
The mother of two is very clear that “It’s still business as usual for us, but with a few tweaks to keep everyone safe.” UBS Monaco’s local workforce is set up for flexible and remote working, with most teams working from home since the beginning of the lockdown and the rest of the teams in their offices “where it’s safe for them to do so.” This has allowed the staff to carry on serving clients without disruption “even with unprecedented levels of demand across our network and digital client channels.”
As Falco puts it, “We’re socially distanced, but no less connected. We hold dozens of one-to-one meetings and large economic and financial webinars online to help our clients navigate the current markets. From Monaco, our clients get access to all our 24/7 global research. This is a huge plus.”
Since the lockdown easing in Monaco on May 4, Falco says the philosophy at UBS Monaco remains unchanged. “We keep our teams safe at home as long as needed while Client Advisors and support teams that need to be at the offices benefit from all the safety and regulation we've putted in place for them.”
Falco points out also that UBS has committed $30 million to global aid programs to address “the most vulnerable in our communities, support our existing partners and match the donations from employees and clients.”
A good example of their pledge is the #Togetherband campaign: 50% of the funds raised go to Covid-19 Response Funds, split equally between the UN Covid-19 Solidarity Fund for WHO and Médecins sans Frontières. The other 50% of the funds will go “to life-changing programs working to deliver the UN Sustainable Development Goals that are critical for a healthy planet.”