UBS Q2 profits double as investment banking and wealth management lift revenue

UBS has just shocked the Street by more than doubling its second-quarter net profit year-on-year, after pocketing $2.395 billion between April and June.

The bank made that announcement on Wednesday, confirming that its performance was driven by stronger results from its investment banking and wealth management units. The result beat the $1.901 billion average estimate from analysts tracked by LSEG.

Revenue for the quarter reached $12.112 billion, just short of the $12.45 billion analysts had expected. UBS also reported a return on tangible equity of 11.8%, an improvement over the 8.5% it posted in the first quarter. Its CET1 capital ratio, a key measure of its financial strength, ticked up slightly to 14.4% from 14.3%.

Investment gains and wealth income boost performance

UBS said its global markets unit within investment banking brought in $2.3 billion, marking a 25% increase year-on-year. It linked that growth to market volatility early in the quarter. Its global wealth management division saw a 12% jump in transaction-based income, also reflecting client activity during that time.

Still, CEO Sergio Ermotti warned that client behavior remains cautious despite equity markets bouncing back. “So clients are still on a kind of wait-and-see attitude, not only institutional and private clients, but… also corporate clients,” Sergio told CNBC’s Carolin Roth. “You see the deployment of cash, but the conviction level is not yet to the extent that it will make it more constructive.”

UBS added that Q3 started with strong performance in risk assets, especially international equities, and a weaker U.S. dollar. It also reported that net interest income (NII) for Q2 landed at $1.965 billion, in line with its projection of a low single-digit percentage decline.

Looking ahead, UBS expects NII to remain broadly stable in Swiss francs in the next quarter, with a slight uptick when translated into U.S. dollars. A post-earnings note from Citi analysts said, “The outlook suggests that NII has finally troughed and existing financial targets have been reiterated, but there is no update on capital return plans.”

The bank’s NII remains a focal point for investors as Switzerland’s central bank recently moved rates back to 0%, trying to manage inflation and stabilize the Swiss franc. “For the time being, it’s going to be difficult to see that [interest] rates will go up,” Sergio said. “The economy is still quite resilient and… inflation has not abated to the level necessary, probably, to take actions.”

Credit Suisse merger moves ahead amid capital battle

UBS also gave an update on its 2023 acquisition of Credit Suisse, saying the integration “remains on track.” It confirmed that one-third of Swiss client accounts have been moved over and 70% of the expected $13 billion in cost savings have already been secured.

The bank said it has completed $1 billion in share buybacks in the first half of 2025 and plans to buy back another $2 billion in the second half. Despite the strong profit, UBS shares have taken hits in 2025 due to uncertainty linked to U.S. markets. That’s largely because of President Trump’s reciprocal tariffs, which have shaken investor expectations around global trade.

UBS addressed that issue directly, saying, “Investor sentiment remains broadly constructive, tempered by persistent macroeconomic and geopolitical uncertainties.” The bank also noted that clients appear increasingly ready to invest. “Against this backdrop, our client conversations and deal pipelines indicate a high level of readiness among investors and corporates to deploy capital, as conviction around the macro outlook strengthens.”

Sergio said the constant back-and-forth around trade was exhausting people’s patience. “People need to see the endgame of all these [trade] discussions,” he said. “Probably there is a little bit of a news fatigue.”

The Swiss government has flagged UBS as “too big to fail” and warned that its failure could damage the country’s economy. But UBS doesn’t agree with the scale of the proposal. It said in June that it supports the rules “in principle” but called the plan “extreme.” It estimates the changes would force it to hold up to $42 billion more in CET1 capital.

KEY Difference Wire helps crypto brands break through and dominate headlines fast