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UBS Profit Up 14%, Beating Expectations

UBS' profit rose sharply in the second quarter, as the bank cut costs to shield from a revenue drop. Profit rose 12 percent before taxes at the unit, which took in 7.5 billion francs in net new money from clients - a rate of 5.4 percent growth.

"There is a divergence between the activity levels of wealth management clients versus what we see on the institutional side and it is well explained by the low volatility levels", he added.

UBS Group AG on Friday reported a 14% rise in second-quarter profit on better-than-expected revenues and healthy inflows into its wealth-management division.

Profit before tax was 1.502 billion and adjusted profit before tax was 1.675 billion francs, were both broadly unchanged. That compares with company-compiled analyst estimates of 591 million francs.

"Improved investor sentiment and enhanced confidence have translated into improvements in wealth management client activity levels", UBS said in a statement. The U.S. private wealth business had outflows of $6.4 billion, also due to "lower recruiting in the quarter", the bank said.

The U.S. brokerage got another boost from the Fed in the second quarter and client activity picked up as wealthy individuals returned from the sidelines. Operating income fell slightly to CHF7.3 billion from CHF7.4 billion a year earlier. Earnings per share grew to 0.31 franc from 0.27 franc past year.

Low interest rates squeezed margins in the home market.

UBS continues to expect a common equity tier 1 (CET1) ratio above 13 percent in the foreseeable future, in line with its dividend payout policy, Chief Financial Officer Kirt Gardner told a conference call on Friday following the group's results.

Asset Management's profit was down 10 percent.



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