The worst is over, UBS expects

UBS is cautiously optimistic that the worst of the corona crisis has passed. The financial group expects to have to put less money aside for losses on loans in the second half of the year. Partly because of this, CEO Sergio Ermotti expects the bank to be able to distribute dividend to shareholders later this year.

Banking supervisors in Europe, including the Swiss, called on banks not to reward shareholders with dividends or share buybacks for the time being, due to the corona crisis. In an interview after UBS’s quarterly earnings, Ermotti indicates that UBS will likely be able to pay the remaining dividend for 2019 in the second half of this year.

UBS posted net income of $ 1.2 billion in the second quarter, down 11 percent from a year earlier. That decline was partly due to the additional $ 272 million that went to the bank’s sling pot. At the same time, UBS made more money from trading services as financial markets are booming after the March hit. More money also flowed from wealthy clients to UBS’s asset management division.

The bank also expects to have to set aside money for bad loans in the second half of the year, but that will be less than the $ 540 million in the first six months of 2020. However, UBS remains vigilant for the economic consequences of the pandemic. CEO Ermotti will be succeeded in September by Ralph Hamers, former CEO of ING.