(Bloomberg) -- UBS Group AG said first-quarter profit fell 64 percent, missing analyst estimates, as all divisions reported a drop in earnings.
Net income fell to 707 million Swiss francs ($741 million) from 1.98 billion francs a year earlier, the Zurich-based bank said on Tuesday. That fell short of the 735 million-franc average estimate of five analysts in a Bloomberg survey.
“Heightened economic and geopolitical uncertainty, as well as global market volatility, led to more pronounced client risk aversion,” the bank said in a statement. “This translated into abnormally low transaction volumes.”
Chief Executive Officer Sergio Ermotti, who has shifted the bank’s focus away from investment banking in favor of wealth management, is struggling with a slump in trading that is hurting earnings across the firm. While there has been some stabilization, economic challenges and geopolitical risks continue to contribute to client risk aversion and “are unlikely to be resolved in the foreseeable future,” the lender said.
The wealth management division reported a pretax profit of 557 million francs, down from 951 million francs a year earlier, while the investment bank posted a drop to 253 million francs from 766 million francs.
Wealth management attracted 15.5 billion francs in net new money in the first quarter, making for annualized growth of 6.5 percent, above UBS’s target of 3 percent to 5 percent. The inflows come after a net outflow of 3.4 billion francs in the previous quarter. Asset management saw net outflows of 5.9 billion francs, with one client pulling 7.2 billion francs over pricing.
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