Spotlight – August 2021

by | Sep 10, 2021 | News, Spotlight

Q2 bank results – another positive quarter underpins a strong recovery

Banks reported another strong quarter, with most issuers beating consensus estimates. Again, a key driver of the results was very low and even negative loan loss provisions – boosting profitability. Underlying trends were also encouraging with the pressure from low rates slightly abating and signs of net interest margins (NIM) among banks starting to bottom out. On the capital front, bank capital metrics remain very robust, although these are expected to slightly decline given more focus on capital distribution (dividend restrictions have been lifted) and regulatory inflation from Basel IV and other initiatives. Overall, the banking sector continues to shine and is delivering strong earnings on a solid capital base. We see no deterioration of asset quality currently, with non-performing loans (NPLs) remaining low and stage two loans on a continued downtrend since the Covid-19 peak. Below are examples of results to illustrate our points:

UBS Q2 2021 results

UBS continues to deliver strong results, with a 19.3% return on CET1 for Q2 2021 on a 71.8% cost / income ratio. CET1 also remains above target at 14.5%. Results were ahead of both internal targets and sell-side consensus estimates.

Earnings:

Pre-tax profits up 64% year-on-year (yoy) to USD 2.6 billion on higher income (+21%) and net reserve releases offset by higher operating expenditure (+10%).

In the bank’s wealth management division, pre-tax profits were up 47% driven by a +21% growth in operating income (fee and transaction income driven). Positive jaws ratio with a cost / income ratio down 3 percentage points at 73%. Assets under management climbed +25% yoy to USD 3.2 trillion; USD 25 billion inflows in fee generating products in Q2 2021.

Swiss retail pre-tax profits up 100% yoy as operating income rose 31% due to a pick-up in transaction income, one-off real estate sales and reserve releases.

Asset management profit before tax was up 62% (+38% ex one-off item) with higher recurring fee income from higher assets under management base (+26% yoy). USD 9 billion of net new money was announced for Q2 2021.

  • The Valuation date: April 15, 2024
    serieAsOFDateFKFund NameISINMTDYTDSIMTDYTDSI
    120,240,411GAM Sustainable Climate Bond fundIE000BSJBO14-0.00310.0099-0.0611-0.310.99-6.11
    220,240,411GAM Star Crdt Ops EUR InvIE00B50JD354-0.00110.05090.5660-0.115.0956.60
    320,240,411GAM Star Crdt Ops GBP InvIE00B510J173-0.00150.03690.8295-0.153.6982.95
    420,240,411GAM Star Crdt Ops USD InvIE00B5769310-0.00130.03400.7435-0.133.4074.35
    520,240,411GAM Interest Trend IncIE00BYM4P913-0.00480.03060.2990-0.483.0629.90

  • Please read this important legal information before proceeding.

    Information contained herein are solely for the use of the person who has accessed this information and may not be reproduced or distributed, even partially, to any other person or entity.

    The material contained herein is confidential and intended solely for the use of the persons or entities with nationality of or respectively with their residence, domicile, registered office or effective administration in a State or Country in which distribution, publication, making available or use of the information is not contrary to applicable laws or any other regulation.

    The material contained herein is aimed at sophisticated, professional, eligible, institutional and/or qualified investors/intermediaries who have the knowledge and financial sophistication to understand and bear the risks associated with the investments described.

    The information is solely product-related and does not take into account any personal circumstances and does not qualify as general or personal investment recommendation or advice. In particular, the information is given by way of information only and does not constitute a specific legal offer for the purchase or sale of financial instruments. Moreover, nothing contained herein is constitutive of any tax advice.

    Every effort has been made to ensure the accuracy of the financial information herein but the information contained herein has not been independently reviewed or verified. Therefore, Atlanticomnium SA gives no assurance, express or implied, as to whether such information is accurate, true or complete and no responsibility is accepted by Atlanticomnium SA for any errors or omissions. Third-party content is the property of its respective provider or its licensor and is protected by applicable copyright law.

    Past performance is not indicative of future performance. The price of shares/units and the income from the funds/trusts can go down as well as up and may be affected by changes in rates of exchange or financial markets fluctuation, out of the scope of Atlanticomnium SA.

    To the fullest extent permitted by law, in no event shall Atlanticomnium SA or our affiliates, or any of our directors, employees, contractors, service providers or agents have any liability whatsoever to any person for any direct or indirect loss, liability, cost, claim, expense or damage of any kind, whether in contract or in tort, including negligence, or otherwise, arising out of or related to the use of the information provided.

    • AgreeCancel
    PERFORMANCE