UBS has beaten second-quarter earnings expectations as the wealthy poured money into its flagship wealth management business.

The Swiss banking giant on Tuesday reporting net profit attributable to shareholders of $2 billion for the second three months of the year. This marks a rise of 63% from the same period last year, and significantly above analysts expectations of $1.34 billion, according to Refinitiv data.

In its earnings report, UBS attributed the success to “favorable market conditions and investor sentiment,” along with “continued momentum in flows and volume growth.”

Other highlights for the quarter:

  • Operating income hit $8.98 billion from $7.4 billion a year ago.
  • Return on tangible equity stood at 15.4%, versus 9.7% a year ago.
  • CET 1 ratio, a measure of bank solvency, reached 14.5% versus 13.3% a year ago.

“Our growth in the second quarter was underpinned by the relationships we have built and strengthened throughout the pandemic and by the trust our clients placed in our people and in our firm. All business divisions and all regions contributed to our results,” UBS CEO Ralph Hamers said in a statement.

“Momentum is on our side and our strategic choices and initiatives are paying off. And we are eager to make the most of the future.”

Hamers told CNBC on Tuesday that the bank’s strategic focus on particular sectors and clients was now starting to manifest itself as increased demand.

“All the changes that we made over the last one to two years around the banking side [are] actually paying off, and with that you see actually that we are gaining market share. It is because of the focus on our client franchise,” he said.

Wealth management boom

The bank’s flagship Global Wealth Management division was the biggest contributor to the results, generating a 47% increase in quarterly profit before tax to $1.3 billion. Recurring net fee income also increased by 30%.


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