UBS posted a net income of $1.8 billion, marking a 14% increase from the same quarter last year. Analysts were expecting the numbers to come in at $1.6 billion. The bank said its revenues came in $774 million lower due to the collapse of Archegos hedge fund last month after taking on too much risk.
“We are taking it very seriously. We have started a very detailed review of the different prime brokers’ relationships that we have, the family offices’ relationship that we have as well, the risk management processes that we have, in order to really get the lessons learned and make sure we implement them, so that going forward it doesn’t happen again,” stated UBS CEO Ralph Hamers.
UBS revealed that it exited all exposure to Archegos, and all related losses in Q2 would be “immaterial” for it.
UBS expects its revenue to be impacted by “seasonal factors” such as lower client activity for the second quarter. On the other hand, the company is looking for a positive effect from higher asset prices. Still, it is aware of the “continued uncertainty” of the economic recovery, which could impact its subsequent earnings.
During the European trading session, UBS stock price fell more than 2%.
Sources: cnbc.com, finance.yahoo.com