Beats expectations, lowers Russia direct exposure

Beats expectations, reduces Russia exposure

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UBS has actually beat expectations for the very first quarter of 2022 and stated it has actually even more lowered its direct exposure to Russia.

The Swiss count on Tuesday reported net earnings attributable to investors of $2.136 billion, above projections assembled by the bank of $1.79 billion.

It marks a 17% increase from the $1.82 reported for the exact same duration of 2021 and follows a drop in quarterly net earnings to $1.35 billion at the end of the year.

The bank has actually formerly explained its market danger direct exposure to Russia as “limited” and on Tuesday stated it had actually lowered its direct exposure to $0.4 billion since March 31, compared to $0.6 billion at the end of 2021.

In addition, it stated it had no product direct exposure to Ukraine or Belarus, which it is not performing any brand-new company in Russia or with Russia- based customers.

“Macroeconomic, geopolitical and market factors created a high level of uncertainty in the first quarter, with Russia’s invasion of Ukraine, COVID-related restrictions and lockdowns, higher volatility, the lower economic growth outlook, and concerns about higher inflation and the monetary policy response,” the bank stated in a release Tuesday.


Speaking to CNBC’s Geoff Cutmore Tuesday, UBS CEO Ralph Hamers stated: “It is pretty unpredictable out there.”

Here are some other essential metrics for the quarter:

  • Operating earnings was available in at $9.36 billion, versus $8.71 billion a year earlier.
  • Return on concrete equity, a procedure of success, stood at 16%, up from 14% a year earlier.
  • CET 1 ratio, a procedure of bank solvency, was 14.3%, versus 15% at the end of 2021.

The business’s stock traded nearly 2% greater quickly after markets opened in Europe.

The ECB is a ‘bit late’

An essential unpredictability on the horizon is how reserve banks will respond to greater inflation– and this can have direct repercussions on banks’ efficiency.

“The ECB will carefully take a look at what the [U.S. Federal Reserve] is doing and the Fed leads the ECB. But likewise, [it’s] a bit late, let’s be truthful. So the ECB is a bit late also, due to the fact that they do not wish to … be faster than the Fed,” Hamers informed CNBC.

The European Central Bank has stated it will end its property purchases program in June, however has actually not yet offered an accurate timeline for when it may increase rates of interest.

“We do expect that there will be a first hike in rates towards the end of the year on the ECB side,” Hamers stated.

Another problem dealing with the European economy is whether the war in Ukraine will drag it into economic downturn. European leaders have actually enforced difficult sanctions on Russia and are thinking about additional procedures to penalize the Kremlin, consisting of a possible restriction on oil imports.

When asked if oil and gas sanctions on Russia might present a danger for Europe, Hamers stated: “Of Russian oil not a lot, of Russian gas that’s a various– a much larger obstacle which is actually because big part[s] of markets depend on gas as their base product to make their item … so that’s what might trigger the 2nd order impact particularly in the European economy.”