LONDON — UBS said on Tuesday that its first-quarter profit fell 64 percent compared with a year ago, as investor wariness about the financial markets continued to hurt its wealth management and investment banking businesses.
The lender, which is based in Zurich, has shrunk the size of its investment bank and shifted its focus to wealth management, an area it considers to be more consistently profitable, but which has been hit hard by turbulence in the markets dating to last year.
One positive in the quarter, however, was that the amount of net new money invested by clients in the wealth management business increased at a stronger pace than in the same period last year.
For the three months ended March 31, UBS reported a profit of 707 million Swiss francs, or about $738 million. That compared with a profit of 1.98 billion francs in the first quarter of 2015.
“In view of exceptionally low client activity levels, we continued to manage our resources effectively while making progress on costs,” Sergio P. Ermotti, the UBS chief executive, said in a news release.
UBS said that some factors that have hurt investor sentiment in recent quarters have stabilized, but it warned that macroeconomic challenges and geopolitical risks that have caused clients to be more cautious “are unlikely to be resolved in the foreseeable future.”
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“Negative market performance, substantial volatility, as well as underlying macroeconomic and geopolitical uncertainty, led to more pronounced client risk aversion and abnormally low transaction volumes in the first quarter,” the bank said.
Operating income declined 23 percent to 6.83 billion francs in the first quarter, from 8 to 84 billion francs in the same period a year earlier.
Net interest income, the measure of what a bank earns on its lending after deducting what it pays out on deposits and other liabilities, rose 5 percent to 1.71 billion francs in the quarter, from 1 to 64 billion francs in the first quarter of 2015.
Operating expenses declined 5 percent to 5.86 billion francs in the first quarter, from 6 to 13 billion francs in the same period a year earlier.
In the wealth management division, UBS said pretax profit fell 41 percent to 557 million francs in the quarter, from 951 million francs in the first quarter of 2015.
UBS said that its wealth management business had 15.5 billion francs in net new money invested by clients in the first quarter, compared with 14.4 billion francs in net new money in the same period last year.
The wealth management business in the Americas, which is operated separately, reported a pretax profit of $212 million in the first quarter, a 21 percent decline from $268 million in the same period a year earlier.
UBS’s investment bank reported a pretax profit of 253 million francs in the quarter, down 67 percent from 766 million francs in the first quarter of 2015.
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