UBS Announces Net Profit Better Than Expected in Q2 2024

Swiss banking conglomerate UBS released its second-quarter earnings, and the results shattered expectations. Net profit hit $1.14 billion in Q2 2024 compared to a predicted $528 million. Revenue also beat analysts’ expectations of $11.52 billion, reaching $11.9 billion.

UBS claimed cost-cutting and revenue growth at its wealth management and investment bank units helped push net profits into positive territory. This is the second quarter in a row the bank stayed in the black against two losing quarters in 2023.

UBS’s global wealth management unit brought in revenue of $6.05 billion, an increase of 15% versus the same period last year. The banking giant attributes the gain to its complete absorption of Credit Suisse as well as increases in client activity and transaction volumes.

“Across the board we showed pretty good resilience, in investment banking, in wealth management, but also I think that we are making good progress in de-risking in our core and taking down cost there,” UBS CEO Sergio Ermotti told CNBC.

According to UBS, gross savings from the Credit Suisse takeover will likely hit $7 billion by year’s end, nearly a half billion more than previously predicted. Overall, Switzerland’s largest bank aims to hit $13 billion in savings by 2026.

“We are well positioned to meet our financial targets and return to the levels of profitability we delivered before being asked to step in and stabilize Credit Suisse,” said Ermotti, per Investopedia.

The future outlook for the banking giant is somewhat muddy. UBS noted continuing conflicts, geopolitical friction, and the 2024 U.S. elections, according to Reuters, which contribute to market instability and make it hard to predict the remaining quarters of this year.

As the U.S. Federal Reserve teases upcoming rate cuts, banks around the world remain cautious. Until things settle down, European banks, such as the Bank of England and Swiss National Bank, aren’t likely to make any significant moves.