UBS reports earnings on Wednesday, 30 July, with earnings seen higher on a decline in revenues. Q2 revenue estimates are for a decline of about 1.6% to $11.6bn (CHF 9.32bn) with estimates for EPS to $0.68 (CHF0.55).

The Swiss bank reported better-than-expected Q1 numbers after a strong showing at its markets unit due to the volatility stirred by Donald Trump’s tariffs. At the same time CEO Sergio Ermotti warned of an uncertain global economic outlook due to tariffs.

In its investment bank division, in Q1 the global markets section saw a record quarter with revenues up 32%, boosted by higher client activity in equities and forex.

Whilst the markets division performed well, the volatility has not come with only positives. The Financial Times reported today that UBS was scaling back the sale of complex FX derivatives after clients suffered losses due to the volatility in the second quarter caused by the tariffs. Earlier this month it was reported the bank had made about 100 goodwill payments to clients who had been hit by the sudden decline in the US dollar.

Meanwhile, the uncertain global economic outlook clouded its view on the global wealth management division, with the bank guiding for net interest income to decline sequentially by a low-single-digit percentage in Q2, with a similar decline seen at the Swiss business. Corporate dealmaking may delayed and it should be noted that Barclays posted a 16% decline in investment banking fees today.

Capital Requirements in focus

Investors will be seeking an update on UBS’s capital ratios, after the Swiss government last month proposed increasing UBS’s capital requirements by up to $26bn. The move is part of a wide-ranging set of reforms designed to prevent another Credit Suisse episode by forcing UBS to fully capitalise its foreign subsidiaries. UBS has called these reforms “extreme” and disproportionate, but the impact is unlikely to be felt until at least 2027. UBS reckons it will add $24bn to its capital requirements, in addition to the $18bn extra it is required to hold after the acquisition of Credit Suisse. In a statement after the proposals, UBS said it would be required to hold about $42bn in additional CET1 capital in total all-in.

As these changes won’t be in effect before2027, UBS reiterated its target of achieving an underlying return on CET1 capital of around 15% and an underlying cost/income ratio of less than 70% by the end of 2026. UBS said it will provide an update on its longer-term returns targets when there is more clarity on the timing of potential changes and when the likely final outcome becomes more visible.

UBS also reaffirmed its capital return intentions for 2025 in June. These include an increase of around 10% in the ordinary dividend per share and repurchasing up to $2bn of shares in the second half of the year, for a total of up to $3bn, subject to maintaining a CET1 capital ratio target of around 14% (Q1 CET1 was 14.3%).