Swiss bank UBS has posted a quarterly profit twice as high as the market forecast, buoyed by investment banking and larger-than-expected savings from the integration of its one-time rival Credit Suisse.
The net profit of $1.1 billion, attributable to shareholders, for the April-June period beat the $528 million forecast in a company-provided poll for what were UBS's first results since it formally completed its merger with Credit Suisse in May.
Results were somewhat mixed across divisions. Investment banking revenues surged, as seen at peers, and performance from its non-core and legacy unit was also strong, analysts said.
Shares in UBS rose 3.1% by 0934 GMT, ahead of the European banking sector .SX7P.
Switzerland's largest bank said savings from the integration with Credit Suisse were coming in faster than forecast, although Deutsche Bank analysts said weaker-than-expected numbers at UBS's Global Wealth Management and Personal and Corporate Banking divisions took some shine off the results.
UBS acquired its longtime competitor last year in a rescue that was engineered by Swiss authorities when Credit Suisse collapsed after a string of financial setbacks and scandals.
In a statement, UBS CEO Sergio Ermotti said that the first-half results reflected the "significant progress" the bank had made since closing the Credit Suisse acquisition.
"We are well positioned to meet our financial targets and return to the levels of profitability we delivered before being asked to step in and stabilise Credit Suisse," he said.
"We are now entering the next phase of our integration, which will be critical to realise further substantial cost, capital, funding and tax benefits."
Deutsche analysts said "cost reductions are quicker-than-expected and net inflows were decent across Global Wealth Management but not in Asset Management," adding that uncertainty around return on capital remained high.
UBS said it had achieved $0.9 billion of additional gross cost savings, reaching around 45% of its cumulative annualised gross cost saving target.
The bank has reduced non-core and legacy risk-weighted assets by 42% since the second quarter of last year, including an $8 billion decline quarter-on-quarter, it added.
