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UBS Q2 Profit Up, Backs Profitable Long-term Growth View; Stock Up

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Shares of UBS Group AG (UBS) were gaining around 2 percent in the morning trading in Switzerland after the banking giant reported Tuesday higher net profit in its second quarter, despite weak operating income. According to the bank, it was the highest second-quarter net profit since 2010.

Looking ahead, Sergio Ermotti, Group Chief Executive Officer, said, "Overall, our goals remain unchanged: to deliver sustainable and profitable long-term growth while investing in our businesses and providing attractive shareholder returns."

For the second quarter, net profit attributable to shareholders was $1.39 billion. The profit was up 1 percent from last year's $1.38 billion.

Earnings per share were $0.37, 2 percent higher than $0.36 a year ago.

Profit before tax increased 3 percent year-over-year to $1.759 billion. Adjusted profit before tax was $1.787 billion, down 2 percent from last year.

Adjusted profit before tax from Global Wealth Management fell 12 percent to $886 million and the drop was 23 percent in Investment Bank. However, Personal & Corporate Banking segment and Asset Management segment recorded higher adjusted profit before tax.

The bank's total operating income, meanwhile, dropped to $7.53 billion from last year's $7.64 billion.

Regarding the outlook, the company said, "A sharp drop in interest rates and expected rate cuts will continue to adversely affect net interest income compared with last year. Our regional and business diversification, along with higher invested assets benefitting recurring revenues, will help to mitigate this. An improvement in investor sentiment and higher
market volatility could help to offset the typical third quarter seasonality."

In Switzerland, UBS shares were trading at 12.04 Swiss francs, up 1.95 percent.

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