Sergio Ermotti is a man of clear words. The CEO of UBS demonstrated this quality once again when presenting the quarterly figures. In a video message, he takes less than four minutes to cover several major topics. In addition to the big Swiss bank's latest quarterly figures, Ermotti explains the status of the Credit Suisse integration and the financial group's investments in artificial intelligence. He also commented on the planned banking reform in Switzerland. The information had a mixed effect on the stock market. UBS shares initially rose by up to 3.7% on July 30, the day the figures were published. Later, the large cap turned downwards. The fact remains that UBS is currently lagging behind the European sector. Deutsche Bank, for example, has reached its highest price in more than 10 years following its latest publication of figures.
In terms of operating performance, the domestic bank does not need to shy away from comparison with its competitors. "Our strong results show how robust our differentiated business model and our diversified global orientation are," explained the CEO. In fact, UBS performed significantly better than expected in the quarter under review. At the bottom line, the bank earned just under USD 2.4 billion, compared with USD 1.1 billion in the prior-year period. According to Reuters, analysts had on average expected a surplus of USD 2.05 billion. The growth was driven by wealth management. Global Wealth Management contributed more than half of the adjusted consolidated profit before tax. The business division benefited from a volatile stock market environment, which led to position adjustments by clients. This environment also helped the "Global Markets" trading segment. UBS posted a record quarter here with sales growth of 25%.
Looking ahead, Ermotti is confident that the financial targets for 2025 and 2026 can be achieved. The CEO believes the company is "fully on track" with the integration of Credit Suisse. He also emphasized the ongoing investments in infrastructure and AI. For example, UBS now has 55,000 licenses for the AI assistant "M365 Copilot". Sergio Ermotti described the planned banking reform in Switzerland as "another major topic". UBS supports most of the proposals made by the Federal Council on June 6. "However, we firmly reject the proposed capital requirements," emphasized the CEO. In order to make UBS more resilient, the government wants to impose an additional capital requirement of CHF 24 billion. According to the bank CEO, such an obligation would make Switzerland a special case among the world's financial centers. Be that as it may, this issue is likely to remain with UBS for some time to come and could prove to be another stumbling block for the share.
In this constellation, the Softcallable Barrier Reverse Convertible offers an interesting investment alternative. Irrespective of the performance of the UBS share, the structured product pays a quarterly coupon of 8.00% p.a.. The barrier is 69% of the initial level. As long as the underlying does not fall to or below this level, the issuer repays the nominal in full at the end of the 18-month term. Due to the soft callable feature, early termination and redemption is possible. Please also note that the partial protection expires if the UBS share consumes the risk buffer. In this scenario, redemption would be directly linked to the performance of the bank's shares. Unsurprisingly, UBS is also attracting the attention of traders. Leonteq also has many suitable solutions for this group of investors. The Zurich-based financial boutique's portfolio now includes more than 120 leverage products on UBS. In addition to mini futures, these include warrants with knock-outs and classic warrants.