UBS delivered better-than-expected earnings for the first quarter of 2025, but the Swiss bank warned of an uncertain outlook due to global trade tensions and U.S. tariffs.
The bank posted a net profit of $1.7 billion for the first quarter, down slightly from $1.8 billion in the same period last year. However, this exceeded analysts’ expectations, which had forecasted a profit of $1.3 billion.
UBS’s global markets division saw a record quarter, with revenues rising by 32% year-on-year. This growth was driven by increased client activity in equities and foreign exchange trading.
Shares of UBS rose more than 2% in early trading following the announcement.
Despite the strong earnings, UBS expressed concerns about the economic outlook, citing the risks posed by U.S. President Donald Trump’s tariffs. The bank stated that higher tariffs on global trade could harm global growth, raise inflation, and create uncertainty about interest rates.
Looking ahead, UBS expects a slight decline in net interest income in its global wealth management business for the second quarter of 2025. It also forecasts a similar dip in its Swiss operations. The bank noted that ongoing market volatility could delay corporate deals and investment decisions.
The trade war led by Trump has sparked concerns of a recession, affecting industries such as banking, retail, and manufacturing. Other banks, including HSBC, have also highlighted risks to loan demand and credit quality due to the tariffs.
UBS reaffirmed its $5 billion share repurchase program for 2025, having already bought back $0.5 billion worth of shares in the first quarter. Despite the uncertain outlook, the bank remains committed to its buyback plans.
The uncertainty extends to regulatory challenges in Switzerland, where UBS faces new rules requiring it to hold more capital. These changes have weighed on UBS’s stock, with government proposals for banking reforms expected in June. The new regulations aim to prevent another financial crisis like the one that led to the emergency acquisition of Credit Suisse in 2023.
Vontobel analyst Andreas Venditti noted that regulatory concerns have contributed to UBS’s underperformance over the past year compared to global peers. UBS’s stock surged by over 80% following the Credit Suisse merger but has since lagged behind other banks after CEO Sergio Ermotti warned of the impact of new Swiss capital rules.
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