UBS Q220 net profit is down by 11% year-over-year to $1.2bn following an additional $272m of loan loss provisions.
The provisions include $110m within personal and commercial banking, $78m in the investment bank and $64m in wealth management.
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For the year to date, UBS loan loss provisions now total $540m.
Other less positive metrics include a cost income ratio of 75.8%, although this is a 1 percentage point improvement y-o-y.
On the other hand, UBS Q220 earnings highlight strong growth within its investment bank unit.
Specifically, investment bank earnings are ahead by 43%.
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By GlobalDataUBS Q220 Personal & Corporate key metrics
Personal & Corporate Banking profit before tax is down by 41% y-o-y.
The main driver of the reduction in profit before tax is CHF104m of credit loss expenses.
Lower credit card fees and revenues from foreign exchange transactions, reflect Covid on travel and leisure spending in particular. The cost/income ratio is 62.8% with new business volume growth in Personal Banking strong at 9.2%.
UBS wealth management profit before tax +1% y-o-y
UBS global wealth management profit before tax rises by 1% y-o-y to $880m. The bank reports double digital profit before tax growth in Asia Pac and EMEA with solid growth in Switzerland. This more than offsets headwinds in the Americas mainly due to lower invested assets at the beginning of the quarter.
Continued high levels of client activity and greater market volatility leads to an 8% improvement in transaction-based income.
The cost/income ratio improves to 76.4%, down 2 percentage points y-o-y as operating expenses reduce by 4%. Loans grow by 2% from the prior quarter to $189bn, with $3.4bn of net new loans. Invested assets at quarter-end are $2.59trn, up 11% sequentially. Net new money is $9bn, and positive across all regions. Net margin is 14 basis points.
On dividend strategy, UBS says that it will consider resurrecting the dividend and share buybacks towards the end of 2020.
