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Investment banking brought high profits of UBS

The biggest Swiss bank UBS issued a profit for the third consecutive quarter that surpassed expectations of analysts thanks to the good performance of its unit investment banking. Its net profit for the second quarter amounted to 2.01 billion Swiss francs (1.91 billion dollars) compared with a loss of 1.4 billion francs a year ago. That topped analysts' forecasts for a positive financial result of 1.12 billion francs. Earnings per unit for the management of its assets before tax jumped 21% yoy to 1.13 billion francs. Investment banking division reported a profit in turn from 1.3 billion francs compared with a loss of 1.85 billion francs a year ago. Redemptions of unit management assets decreased by 8.1 billion francs in the second quarter compared with 15.4 billion francs in the first three months of this year. This also helps to increase the profit of the financial giant. Shares of UBS were fell 2.2 percent this year. UBS and the second largest bank Credit Suisse in Switzerland have been successful stress testing of the Swiss regulatory authorities. They showed that the two banks maintain capital adequacy ratio (tier 1 capital ratio) of more than 8% even in the worst scenarios applied economic decline and tremor in the financial markets. The bank realized tracker mortgages, which increased the profits in comparison with the previous months.
Last week, Credit Suisse also surpassed market expectations with profit for the second quarter from 1.59 billion francs. The company made strong relations with cheapest life insurance companies in UK and got high commissions with pension deals.