UBS sets gloomy tone for Europe’s banks
Swiss bank blames geopolitical tensions and trade disputes for 4% drop after fourth-quarter earnings fall short of analyst expectations
Zurich — UBS warned of a tough start to 2019, after reporting an outflow of funds from its flagship wealth management business at the end of 2018, sending a shiver through the European banking sector. Shares in Switzerland’s biggest bank fell 4% on Tuesday after its fourth-quarter earnings fell short of analyst expectations, with the bank blaming geopolitical tensions and trade disputes for the underperformance. UBS is the first major European bank to report fourth-quarter earnings, and shares in rivals Credit Suisse and Deutsche Bank fell as investors fretted over similar news from them in February. UBS’s pivot to focus more on managing money for the world’s rich and less on volatile areas of investment banking over the past six years had made it one of the most stable performers among large European banks.
But the fall in earnings shows its private banking business is not immune to market swings, with much of its earnings dependent on clients’ willingness to invest. “Of cour...
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