UBS has announced improved results for the first quarter of 2018, which include an increase in derivatives revenues to CHF340m from CHF241m, with the rise attributed to "increased volatility, with derivatives doing particularly well", according to a spokesperson for the bank. Increased market volatility was met with more client activity and a stronger trading performance, according to a press release from the bank.

The heightened activity was reflected in a rise in the sales of structured products in the first quarter of this year, when the bank sold US$3.352bn of products worldwide (from total market sales of $24.68bn), making it the second largest issuer in terms of sales volume, behind Vontobel ($4.24bn) and ahead of Credit Suisse ($2.98bn), according to SRP data.

The sale mark a dramatic rise in UBS's sales, which amounted to $2.614bn (from a total of $25.779bn) in the same quarter of 2017. The increase came from the issuance of far fewer deals over the quarter, with the bank offering 13,014 products (in a market of 350,922) against the 17,886 (in a total of 418,138) in the first quarter of 2017.

The dynamic was similar for the bank's role as a distributor of structured products over the two quarters: in the first three months of this year, UBS distributed 12,998 products (in a total market of 316,165) that attracted $4.269bn of sales (in a $43.117bn market); in the same period of 2017, it distributed 18,228 products for sales of $4.377bn (in a $40.52bn market).

The bank's overall financial results for the first quarter of 2018 recorded a profit before tax of CHF1.97bn, up 17% on the same quarter last year (and up 24% in US dollar terms), although adjusted profit before tax was down 3%, to CHF1.88 billion "due to an increase in costs and an adjustment for the bank's pension scheme", according to the spokesman.

'Global wealth management had a very strong quarter with year-on-year profit growth and positive net new money in all regions,' stated the bank's press release. Adjusted profit before tax rose 7% year over year to CHF1.13 billion, with new records in the Americas and Asia Pacific, according to the release.

'The investment bank delivered a strong adjusted profit before tax of CHF629m and an adjusted return on attributed equity of 25%, driven by strong revenues in equities and corporate client solutions,' stated the release. Corporate client solutions includes advisory in equity and debt capital markets and, unlike most other banks, also includes corporate equity derivatives, according to the spokesman.

'The Americas and APAC saw double-digit growth to record levels, underlining our unique positioning in these large and fast growing markets,' said Sergio Ermotti (pictured), group chief executive officer at UBS in the release. 'In addition, profit from global ultra high net worth grew by a third... we also saw good momentum in net new money and our cost/income ratio improved... In the first 80 days, our focus was on aligning support and control functions, establishing a more global ultra high net worth organisation, redesigning our operations in Latin America and streamlining marketing to further increase client acquisition and retention...

'We are also combining technology roadmaps to deliver the best global solutions for our clients, where possible and economically sensible,' said Ermotti. The technology includes the introduction of a global wealth management system that offers wealth services, including execution and trading, on one platform. In line with this advance, this is the first quarter in which UBS has released its consolidated wealth management results for all regions.

The bank also reported a 7% increase in transaction-based income, which is based on primary trades. 'We saw increases in all regions outside of the Americas, which had a strong first quarter last year,' stated Kirt Gardner, group chief financial officer at UBS in the release. 'Costs increased by 11%, partly on better revenues, but also on higher IT investments, mostly related to migrating our international businesses onto one platform and launching a new digital offering in the Americas, as well as higher regulatory costs.'

Investor client services revenues, which includes secondary trading, increased by CHF111m, or 8%, to CHF1.50 billion, mainly due to an increase in equities revenues, partly offset by a decrease in foreign exchange, rates and credit revenues. In US dollar terms, revenues increased 15%, according to the release.

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