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UBS posts second quarter net profit of 1.3 billion Swiss francs, beats forecast

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UBS posts second quarter net profit of 1.3 billion Swiss francs, beats forecast

UBS posts second quarter net profit of 1.3 billion Swiss francs, beats forecast
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Chris Helgren(Reuters)
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ZURICH (Reuters) - UBS on Tuesday posted a net profit of 1.3 billion Swiss franc (£1 billion) for the second quarter of 2018, beating analyst expectations, as global economic growth prospects provided a supportive backdrop to markets.

Switzerland's biggest bank said the 9 percent rise in net profit put its earnings for the quarter above the median net profit estimate of 1.044 billion francs in a Reuters poll. Pre-tax profit rose 12 percent to 1.7 billion francs, against a forecast of 1.418 billion francs.

Robust development of its core wealth management business and growth in investment banking boosted results for the quarter, the Zurich-based bank said.

Wealth management saw 1.2 billion francs in net outflows, UBS said, due to higher seasonal tax-related outflows of about 4.62 billion francs in the United States, and a single outflow of 4.4 billion francs in the Americas from a corporate employee share programme.

"Global economic growth prospects continue to provide a supportive backdrop to markets, although ongoing geopolitical tensions and rising protectionism have dampened investor confidence and remain a threat," the bank said in its statement.

It also said that U.S. dollar interest rates are still expected to rise gradually, which is likely to support net interest income in its global wealth management business.

UBS said provisions for litigation, regulatory and similar matters at the end of the second quarter were 2.44 billion francs, slightly up from 2.33 billion at end-March.

In July, UBS entered into an agreement under which the bank will pay $850 million to resolve litigation over residential mortgage-backed securities. A significant portion of this amount will be borne by other parties that indemnified UBS, the bank said.

The bank confirmed its 2020 targets.

(Reporting by John Miller; Editing by Sunil Nair)

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