La turbulence and volatility markets due to the war in the Middle East are good for banks' accounts. The European giants demonstrated this today, UBS, Deutsche and Santander which have seen sharply rising profits in first quarter. However, the focus is on the provisions.
UBS: Profits soar 80%
ubs announced a Useful net of first quarter UBS posted a higher-than-expected result, thanks to record trading revenues amid market turbulence triggered by the war with Iran. Just days after the Swiss government published a banking bill that could require it to raise an additional $20 billion in core capital, UBS reported a net income of $3,0 billion in the first quarter of the 2026, up 80% on an annual basis and above the average estimate of $2,3 billion that emerged from a survey of analysts commissioned by the company. title on the stock exchange share this morning is up 4,11%.
I revenues of the division of investment banking of the Swiss institute are increased by 27% on an annual basis, driven by an all-time record in trading sector, with record revenues in all sectors: from stock market, currency market, to those of the interest and credit rates. According to the bank, the underlying revenues of the section of advice for mergers and acquisitions (BUT) and initial public offerings (IPO) rose, thanks to a bumper quarter in stock markets.
In the sector of global wealth management, Underlying transaction revenues increased 17%. The division attracted $37 billion in net new assets, with positive flows across all regions. “Markets have proven largely resilient so far in second quarter,” UBS said in a statement.reflecting expectations of a lasting diplomatic solution to the war with Iran. However, the risks are high and conditions could change rapidly, which could impact customer sentiment.
UBS then reiterated its intention to buy back at least $3 billion in shares in 2026, saying it was on track to do so by the end of July and aimed to do more by the end of the year, depending on the visibility of parliamentary debates on capital rules.
Spotlight on new Swiss capital rules, to avoid a Credit Suisse-like collapse
“Overall, these are encouraging results, although we expect the focus to once again be on capital proposals Swiss companies and what this means for future share buybacks,” Citi analysts said in a note.
The proposed tougher Swiss banking law aims to prevent a recurrence of the traumatic collapse of Credit Suisse, acquired by UBS in 2023 through a takeover transaction state-orchestrated emergency rescue. Last week the Swiss government granted some relief to UBS, but maintained its main demand, namely that the bank fully capitalizes its foreign branches, an issue on which parliament has the final say.
The CEO Sergio Ermotti said UBS will continue to engage constructively on Swiss capital regulations“These developments do not change, and will not change, our identity as a company.” UBS, he said, is on the right track to complete the integration of Credit Suisse by the end of the year, unlocking the potential for further growth and earnings in terms of efficiency. The integration-related expenses decreased in the first quarter and further cost reductions of $800 million brought the total cumulative savings to $11,5 billion, he added. UBS has reduced staff by approximately 1.500 employees full time in the first trimester.
Deutsche Bank: Profits highest ever despite provisions and exchange rates
Deutsche Bank, the largest German credit institution, has registered its highest profit ever under the guidance of the managing director Christian Sewing, despite greater provisions for credit risk and the negative impact of exchange rates. The credit institution has also revised its rates upwards Investment banking revenue forecast for 2026, expecting a significant increase in revenue rather than a slight increase. The stock is down 2,4% this morning.
The German banking giant recorded a Net income attributable to the shareholders of 1,912 billion euros in the quarter, up from the profit of 1,775 billion euros in the previous year. The result was better than expectations Analysts had forecast a profit of €1,768 billion. "This result is even more remarkable given the increasingly uncertain geopolitical environment since the beginning of the year, particularly the conflict in the Middle East," Sewing said in a message to staff.
Deutsche Bank has registered provisions for credit losses The provision amounted to €519 million, up from €471 million a year ago and exceeding analysts' expectations of €447 million. The bank emphasized that the provisions include a reserve "reflecting macroeconomic uncertainties."
The global investment bank remained the largest contributor to quarterly revenue, although revenue remained unchanged, as expected.weakening of the dollar negatively impacted the bank's euro-denominated profits. Within the investment bank, the revenues Revenue from fixed income and currency trading, one of its core businesses, fell 1%, better than expectations for a 3% decline. Revenue from origination and advisory services rose 5%, slightly below expectations for a 5,9% increase.
Santander's profits rose 12,5%. Keep an eye on provisions.
Santander, the largest eurozone lender by market capitalization, announced a Net income first quarter revenue increased by 12,5% year-on-year: the higher revenues and lower costs they helped to compensate greater provisions, partly linked to car accident compensation in the UK. title on the stock exchange quota this morning is in increase of 0,52%.
Santander recorded a Net income underlying record of €3,56 billion ($4,17 billion) in the eighth quarter, in line with forecasts. Taking into account the capital gains of 1,9 billion euros resulting from the sale of a 49% stake in the its Polish branch, theThe bank's net profit increased by 60% in the quarter, reaching 5,46 billion euros.
For decades, the diversification Santander's coverage, which spans 10 major markets, has protected the bank from economic downturns in individual regions, but made it vulnerable to currency devaluations, especially in Latin America. It has recently decided to expand into major developed markets with the acquisition of TSB in Great Britain and Webster in the United States, operations which, in his intentions, should contribute to increase profits by more than 40% over the next three years, bringing them to over 20 billion euros. Santander acquired eight million new customers on a year-over-year basis by the end of March, while revenues increased 4% in the quarter and total costs decreased 2,6%.
"Our geographic and balance sheet diversification (...) remains a key strength in an environment of increasing geopolitical uncertainty. Looking ahead, we expect this performance to continue," he said in a statement. Ana Botin, executive chairman of Santander.
The bank reiterated its objectives for the period 2026-2028, which for 2026 expect mid-single-digit revenue growth and lower costs in constant euros, higher profits and a capital ratio of 12,8-13%. provisions Total net assets increased by 4,6% to €3,23 billion, in line with analysts' forecasts. The bank set aside €207 million in additional provisions at its global consumer digital services unit, Openbank, to compensate motorists for the mis-selling of car finance in the UK. Santander had already set aside £461 million for the compensation program in the UK.
