"Turmoil" boosts trading business, UBS Q2 profit doubles year-on-year

Market turmoil has unexpectedly driven UBS's performance growth. UBS Group AG announced today that its second-quarter 2025 results were impressive, with net profit doubling year-on-year to approximately $2.4 billion, significantly exceeding analyst expectations. This strong performance was mainly attributed to increased trading activity spurred by market turmoil and heightened trading willingness among wealth management clients. Specifically, UBS's net profit attributable to shareholders in the second quarter reached $2.4 billion, surpassing the market consensus expectation of $2.045 billion provided by the company. This figure also far exceeded the $1.136 billion from the same period last year and was above the average analyst expectation of $1.901 billion from LSEG. The core driver of the better-than-expected performance came from its investment banking division's global markets business. Revenue in this division surged 25% this quarter to $2.3 billion. Meanwhile, wealth management trading income grew by 12%. Reuters noted that the trading hotspots during the period were focused on market fluctuations triggered by U.S. President Trump's tariff policies ("ructions"), which created new trading opportunities. UBS CEO Sergio Ermotti told CNBC that while market volatility provides opportunities, clients remain in a "wait-and-see" mode and have not yet reached a high level of activity. UBS expects that trading and trading activity will normalize in the coming quarter. Net interest income from global wealth management and Swiss operations is expected to remain roughly stable when calculated in Swiss francs. UBS stated that at the start of the third quarter, "risk assets, particularly international stocks, performed strongly, while the dollar weakened." Regulatory Pressure Remains a Challenge Currently, regarding major strategic matters, UBS stated that its integration process following the acquisition of Credit Suisse is "on track," with one-third of Credit Suisse's client accounts having been migrated. However, UBS faces an increasingly stringent regulatory environment. Reports indicate that the Swiss government proposed stricter rules for the country's only remaining "too big to fail" bank—UBS—in June. The bank reiterated its position in its financial report, stating that it "strongly disagrees" with the proposed requirement for its foreign business risk coverage capital to experience "extreme growth." UBS estimates that this could lead to an additional $24 billion in common equity tier 1 capital (CET1). Ermotti stated that until the final regulatory plan is determined, UBS will continue to focus on integrating Credit Suisse and "consider appropriate actions to protect shareholder interests."