UBS Group AG (UBS) shares surged in pre-market trading on Wednesday after the company reported strong second-quarter 2024 results, beating analyst estimates. The bank’s revenue surged 25% year-over-year to $11.9 billion, exceeding the consensus estimate of $11.3 billion. Underlying operating profit before tax also climbed significantly, reaching $2.06 billion compared to $891 million in the same period last year.
The robust performance was driven by growth across various segments. Global Wealth Management, a key division, reported $6.05 billion in revenue, representing a 15% year-over-year increase. The division also saw $26.9 billion in net new assets during the quarter. Despite the strong top-line performance, UBS’s net profit attributable to shareholders declined to $1.14 billion for the quarter, down from $27.3 billion in the previous year. However, the company’s earnings per share (EPS) of $0.34 still surpassed the consensus estimate of $0.12.
UBS also provided an update on its ongoing integration with Credit Suisse, which was completed in mid-2024. The company achieved $0.9 billion in additional gross cost savings, bringing the total annualized exit rate gross cost savings to approximately $6 billion compared to the combined figures from fiscal year 2022. UBS expects to achieve about $7 billion in gross cost savings by the end of 2024, representing 55% of its goal of $13 billion by the end of 2026.
The bank also revealed its plans for the coming months, highlighting that client migration to UBS platforms will commence in the fourth quarter of 2024, with substantial benefits expected by the end of 2026.
Looking ahead, UBS expects integration-related expenses of approximately $1.1 billion in the third quarter of 2024. While the rate of gross cost savings is projected to decline slightly sequentially, the bank anticipates partially offsetting these expenses with approximately $0.6 billion from purchase accounting effects.
For the second half of 2024, UBS projects a $1 billion pre-tax loss for non-core and legacy units, along with modest revenue gains and sequential cost improvements. The bank’s strong performance and positive outlook have contributed to its share price gains, with UBS shares rising around 25% over the past 12 months, according to Benzinga Pro.
Investors interested in gaining exposure to UBS can consider ETFs such as Avantis International Equity ETF (AVDE) and American Century ETF Trust Avantis Responsible International Equity ETF (AVSD).
