May 27, 2022

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Exceeds expectations, reduces exposure to Russia

Exceeds expectations, reduces exposure to Russia

UPS He exceeded expectations for the first quarter of 2022 and said he had reduced his exposure to Russia.

The Swiss bank on Tuesday reported a net profit attributable to shareholders of $2.136 billion, higher than the $1.79 billion forecast the bank has collected.

It is up 17% from the $1.82 reported in the same period in 2021 and follows a quarterly net profit decline to $1.35 billion at the end of the year.

The bank previously described its exposure to market risks to Russia as “limited” and said on Tuesday that it had reduced its exposure to $0.4 billion on March 31, compared to $0.6 billion at the end of 2021.

In addition, she said that she has no physical exposure to Ukraine or Belarus, and that she does not conduct any new business in Russia or with clients in Russia.

“Macroeconomic, geopolitical and market factors created a high level of uncertainty in the first quarter, with Russia’s invasion of Ukraine, COVID-related restrictions and lockdowns, increased volatility, lower economic growth expectations, and concerns about rising inflation and the monetary policy response,” the bank said in a statement issued on Tuesday. .

Cloth Coverini | AFP | Getty Images

Speaking to CNBC’s Jeff Catmore on Tuesday, UBS CEO Ralph Hammers said: “It’s pretty unpredictable out there.”

Here are some other key metrics for the quarter:

  • Operating income was $9.36 billion, compared to $8.71 billion a year earlier.
  • The return on tangible equity, a measure of profitability, was 16%, up from 14% a year earlier.
  • CET1, a measure of a bank’s solvency, was 14.3% versus 15% at the end of 2021.
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The company’s stock has been flat for the year so far.

European Central Bank ‘a little late’

A key uncertainty looming is how central banks will respond to rising inflation – and that could have direct consequences for banks’ performance.

“The European Central Bank will look closely at what [U.S. Federal Reserve] It does this and the Fed is way ahead of the European Central Bank. but also, [it’s] A bit late, let’s be honest. So the ECB is a little bit late as well, because they don’t want…to be faster than the Fed,” Hammers told CNBC.

The European Central Bank It said it would end the asset purchase program in June, but did not give an exact timetable for when the interest rate hike would occur.

“We expect there will be a first rate hike towards the end of the year from the European Central Bank,” Hammers said.

Another issue facing the European economy is whether the war in Ukraine will drag it into recession. European leaders have imposed tough sanctions on Russia and are considering further measures to punish the Kremlin, including a ban on oil imports.

Asked if oil and natural gas sanctions against Russia could pose a risk to Europe, Hammers said: “For Russian oil it’s not so much, for Russian gas it’s a much bigger challenge and that’s really a big part of it.”[s] Many industries depend on gas as an essential commodity for the manufacture of their products… and this is what could cause the impact of the second order specifically in the European economy.”