UBS, the world's largest wealth manager, said second quarter net profit jumped 47 percent from one year ago to 3.147 billion Swiss francs ($2.54 billion), well ahead of analysts' forecasts.
The bank said in a statement on August 15 that net new money inflows into its wealth management business in the second quarter were 31.2 billion francs, down from a record 33.6 billion in the first quarter but above most analysts' expectations.
The bank said it expected 2006 to be "another year of strong results" and that it had a strong pipeline of deals for its investment bank, but that it anticipated a return to a more normal seasonal pattern for financial firms with a softening in the second half.
Analysts said they were impressed with the results which compared well with UBS's main rivals. "It looks very strong in fixed income trading and in private banking", said Matthew Clark, an analyst at Keefe Bruyette and Woods.
A Reuters poll of 19 analysts had produced a net profit forecast of 2.717 billion francs on average, with a highest estimate of 3.125 billion. Net profit was 3.504 billion francs in the first quarter of 2006 and 2.147 billion francs in the second quarter of 2005.
Analysts had expected the flood of net new money into its wealth management business to abate from the first quarter, with an average forecast of 26 billion francs.
That compared with a net new money inflow of 19.2 billion in the second quarter of last year.
UBS's two chief European rivals in investment banking, Deutsche Bank and Credit Suisse, suffered a battering on stock markets when investors homed in on poor trading results and unexpected one-off charges, respectively.
Tom Hill, chief communications officer, told a conference call following the results release that the bank had posted good results in proprietary trading in fixed income and equities in the second quarter.
The Swiss bank clearly outshone its two European peers and financial markets were likely to reward it, said one analyst.