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UBS, Société Générale and Barclays have become the latest banks to reap a windfall from the market turmoil unleashed by US President Donald Trump’s tariffs, as traders helped power the lenders to better than expected first-quarter profits.
Revenues at UBS’s markets business surged 32 per cent to a record $2.5bn, SocGen’s trading revenues climbed 11 per cent to €1.76bn, while Barclays reported a 16 per cent increase to £2.7bn.
Since returning to the White House in January, Trump’s erratic tariff policy has dominated global stock, bond and currency markets, triggering volatility as investors contend with the fallout from his attempt to remake the global trading order.
UBS said on Wednesday: “Markets are likely to remain sensitive to new developments, both positive and negative, which are likely to lead to further spikes in volatility.”
The stellar trading performance helped the three banks’ profits surpass expectations for the quarter, cushioning the blow from a slowdown in dealmaking in the period.
UBS reported net profit of $1.7bn in the quarter, surpassing the $1.3bn forecast by analysts, but down from $1.8bn in the same period a year ago. Revenues were flat at $12.6bn.
SocGen’s net income more than doubled to €1.6bn while profits at Barclays rose to £1.9bn, up from £1.6bn a year ago, exceeding forecasts.
The trio join Wall Street’s biggest banks in riding the market volatility. JPMorgan Chase, Goldman Sachs, Morgan Stanley, Bank of America and Citigroup together generated almost $37bn in trading revenues in the quarter.
At Soc Gen, the equities trading business stood out, with revenues climbing more than a fifth to a record €1.06bn. Barclays’ fixed-income traders delivered a 21 per cent jump in revenues while revenues in equities rose 9 per cent.
The strong showing from UBS’s trading business overshadowed its global wealth management business, the bank’s biggest profit engine in recent years.
The division attracted $32bn in new assets in the period, with the unit’s pre-tax profit of $1.4bn driven by higher fees.
Todd Tuckner, UBS’s chief financial officer, said there was a rise in client activity at the bank in response to Trump’s tariff announcement in early April, but added that there was “more and more uncertainty getting priced in”.
“April started out OK-ish, but if this environment persists, then naturally it’ll have an impact on our activity levels with our clients.”
“Persistent uncertainty will create more sellers and buyers,” Tuckner said. “And if it does persist, we’ll move people to the sidelines versus being active.”
Separately, and even without a sizeable trading business, Santander still managed to post a record profit in the first quarter, with net income jumping 19 per cent to €3.4bn, the company announced on Wednesday.
The Spanish lender was helped by a strong performance at its retail business, especially in Spain, where it benefited from a decision to spread out the burden of the country’s banking tax across the full year rather than booking it all during the first quarter.
It also reported record net fee income during the period, in part thanks to higher trading activity at its global markets division.