ZURICH (Reuters) - The world's largest wealth manager, UBS (S:UBSG), reported a 40% increase in first-quarter net profit on Tuesday, as clients increased trading activity during market turmoil sparked by the coronavirus outbreak and as it extended more loans to its wealthy clients.
It reported net profit of $1.595 billion. The bank had previously said it expected to report first-quarter net profit of around $1.5 billion, with strong operating performance across all its business divisions, even after accounting for the risk of higher defaults as a result of the virus.
"Looking ahead, the range of possible outcomes remains very wide, and it is too early to make reliable predictions about the timing and shape of any potential economic recovery," Switzerland's largest lender said in a statement. "The continued disciplined execution of our strategic plans will help to mitigate this."
The bank recorded $268 million in credit loss expenses for the quarter, saying it was primarily exposed to credits related to its wealth management clients and within Switzerland and noting its credit book was "of high quality".
Cross-town rival Credit Suisse (S:CSGN) on Thursday posted a sevenfold increase in its credit loss provisions, as lenders globally brace for rising defaults due to the virus.
UBS's core business managing money for the world's wealthy saw invested assets decline sequentially to $2.339 trillion on the back of falling asset valuations, while revenues grew across all main lines, helping operating income rise 14%.