UBS: towards a turnaround in the second half?

The Swiss bank published in the second quarter 2019 its best set of results for a decade, helped by wealth management in the Americas. Asset under management, however, decreased by approximately USD 2 billion, mainly due to US tax-related outflows. Mr. Ermotti, the CEO, remains cautious and considers that the macroeconomic environment is still challenging. The investment banking division is suffering from price pressures. Interest income, which tracks the money made from loans and deposits, declined by USD 75 million compared to a year earlier. The context of extremely low, even negative, rates will continue to affect this line of business at least until 2020. Notwithstanding, the bank was able to cut its costs and to some extent adapt to this challenging environment. At the very least, UBS seems to have found a relatively stable floor from which it could bounce back.