By Ariane Luthi
ZURICH, July 29 (Reuters) - UBS booked a 17% jump in second-quarter profit on Wednesday, ahead of expectations, and said it plans to buy back shares worth $3 billion by the middle of next year at the latest.
Of that, it intends to repurchase at least $1 billion of shares over the next three months.
"Strong results in the second quarter and healthy capital generation have further fortified our balance sheet for all seasons and allow us to continue deploying financial resources towards
profitable growth opportunities," UBS CEO Sergio Ermotti said in a statement.
Net profit attributable to shareholders for Switzerland's biggest bank came in at $2.8 billion, compared with a forecast of $2.39 billion in a company-provided poll of analysts.
Its performance was driven by broad-based growth, particularly in wealth management and for its investment bank, with the trading division delivering a record second quarter, UBS said.
UBS said net new assets for its global wealth management division came in at $36 billion during the quarter. The Americas had an inflow of $1 billion — the second positive quarter in a row after a run of outflows due to the loss of some relationship managers.
SHARE BUYBACKS CONTINGENT ON CAPITAL DEBATE
The share buyback plans follow $3 billion worth completed in July. Analysts had forecast UBS would conduct some $4.45 billion worth of buybacks during 2026.
UBS reiterated that the amount and pace of buybacks would depend on its short-term financial performance as well as the outcome of Swiss banking rules being debated in response to the 2023 collapse of Credit Suisse and its subsequent takeover by UBS.
Concerned about the risks to the Swiss economy should UBS collapse, the government has sought to make the bank hold around $20 billion in additional Common Equity Tier 1 capital — a stance that UBS has said is excessive and would damage it competitively.
Lawmakers are expected to water down that requirement as they begin drafting the bill next month, as many fear requiring a permanent buffer of this scale could scare off UBS' investors.
The integration of Credit Suisse is on track to be completed by the end of 2026, the bank said.
UBS added that it had made additional gross cost savings of $1.1 billion in the second quarter, bringing cumulative gross savings to $12.6 billion.
It is also well positioned to outperform its 2026 exit rate capital return target of about 15%, the bank said.
UBS, which has steadily reduced headcount after taking over Credit Suisse, cut staff levels by about 2,500 full-time employees in the quarter, bringing the bank's internal workforce below 100,000 for the first time since the takeover.
The bank reported a cost-income ratio of 72.9% for the second quarter, down from 80.5% a year earlier and beating a consensus forecast of 75.6%.
(Reporting by Ariane Luthi; Editing by Edwina Gibbs)
