Bond Market News

UBS reported a 63% rise in net profits YoY to $2bn in Q2, beating expectations of $1.34bn. Pre-tax profits rose across all geographies with the CEO saying, “Momentum is on our side and our strategic choices and initiatives are paying off…We have no intention of letting go of this.” Known for its wealth management arm, the division saw profits grow 47% YoY to $1.3bn. Its recurring net fee income also increased by 30%. UBS, which took a $774mn hit in Q1 due to Archegos saw its earnings get hit by another $87mn in Q2 due to the hedge fund’s collapse. The bank also set aside $2bn for expected legal costs – awaiting the result of a court decision in France for facilitating tax fraud and another investigation with Belgian authorities. The bank’s CET1 ratio stood at 14.5% vs. 13.3% a year ago.

UBS’s dollar bonds were flat – its 6.875% Perps were at 114.53, yielding 3%.

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