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Group PBT USD 2,298m, +14% YoY (Graphic: UBS Group AG)
UBS (NYSE:UBS) (SWX:UBSN):
Ralph Hamers, UBS’s CEO said:
“In the first quarter of 2021, our clients benefited from our broad capabilities, geographic reach and connectivity. They continued to put their trust in us and looked to UBS for advice, solutions and thought leadership in a dynamic market environment. This was evidenced by the continued net inflows that helped our invested assets across wealth and asset management grow by over 100 billion dollars to 4.2 trillion. This, together with favorable market conditions and improved investor sentiment, contributed to positive results in the first quarter of 2021. All in all, we saw record activity across our client franchises, resulting in operating income being up 10%, profit before tax up 14%, and net profit attributable to shareholders up 14%, compared with the first quarter of 2020 which was strong in itself.
However, our first quarter results also factored in a loss related to the default by a single US-based prime brokerage client. We are all clearly disappointed and are taking this very seriously. A detailed review of our relevant risk management processes is underway and appropriate measures are being put in place to avoid such situations in the future. This never impeded our ability to serve our clients. We were still able to increase our CET1 capital ratio to 14% and deliver a return on CET1 capital of 18%. Our Investment Bank fully absorbed this loss, yet still delivered a 13% return on attributed equity, which would have been in excess of 30% had it not been for this incident.
Our financial strength and ability to weather all seasons, together with our unique positioning as the largest truly global wealth manager, enable us to look to our future with confidence. In an ever-evolving world, we, too, must continue to improve and adapt. That’s why I’m proud to unveil our new strategy today. It all starts with our purpose, our why: Reimagining the power of investing. Connecting people for a better world.
Our purpose and strategy — underpinned by a newly defined vision, our client promise, and five strategic imperatives — outline the actions we’re taking to unlock the power of UBS and evolve into a more client-focused, more agile, more digital firm. A firm that puts a personalized, relevant, on-time and seamless client experience and sustainability at the center of everything we do.”
1Q21 financial performance — selected highlights
Group Return on CET1 capital 18.2% Target: 12--15% Return on tangible equity 14.0% Cost/income ratio 73.8% Target: 75--78% Net profit attributable to shareholders USD 1.8bn CET1 capital ratio 14.0% Guidance: 13% CET1...