After all the recent complaints about the “unacceptable performance” of UBS’s investment bankers and traders, outgoing CEO Sergio Ermotti seems to have used one of his last quarters at the helm to give staff in the investment bank a pay rise. Suddenly, they are star performers.
Pre-tax profits in UBS’s investment bank rose 242% in the first quarter compared to the same period of 2019. Return on attributed equity in the business was 22.8%, compared to 6.8% one year earlier. The cost income ratio was a historically modest 68%, and all of a sudden UBS’s bankers and traders were stand out performers.
UBS doesn’t break out debt capital markets revenues (DCM) and equity capital markets (DCM) revenues individually any more, and categorizes derivatives and execution revenues separately, but the chart below shows how its Q1 performance roughly compared to rivals. UBS’s M&A bankers and fixed income traders both look impressive.
Source: efinancial careers