Swiss giant UBS saw profits slide 23% in the second quarter as it warns of credit losses ahead due to COVID-19

• UBS posted a 23% quarterly drop in net income in the second quarter as coronavirus continues to hit Europe's banking sector.
• Net income fell from just shy of $1.6 billion in the first quarter, to $1.23 billion in the second, it said.
• On a year-on-year basis, profits fell 11% from the $1.39 billion income seen in the second quarter of 2019.
• Credit losses were $540 million for the first half of the year, and the bank warned of "elevated group credit loss expenses" in the second half of the year.
• UBS said it was reviewing its cash dividends and share repurchases due to COVID-19, adding it may resume it share repurchases in Q4.

Swiss banking giant UBS saw its net profit fall 23% in the second quarter as the COVID-19 took its toll and the bank warned of further credit losses due to the pandemic.

Net income fell from just shy of $1.6 billion in the first quarter, to $1.23 billion in the second, 23% lower. On a year-on-year basis, profits fell 11% from the $1.39 billion income seen in the second quarter of 2019.

The bank also reported credit losses of $272 million in the second quarter and $540 million for the first half of the year as it warned of further losses due to COVID-19.

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UBS said in its earnings statement: "Given the continued uncertainty related to the pandemic, it is reasonable to expect elevated Group credit loss expenses in the second half of 2020, but below those seen in the first half of the year."

CEO Sergio Ermotti added: "As we continue to face a challenging environment, we are adapting and accelerating the pace of change, supporting our clients, employees, and the economies in which we operate, while remaining focused on our strategic priorities."

The bank is also reviewing its cash dividends and share repurchases.

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The bank said: "While it is premature to provide guidance for 2020, going forward the intention is to continue to pay out excess capital and maintain the overall capital returns to shareholders consistent with previous levels.

"Depending on business development and the outlook in the second half, UBS may resume share repurchases in the fourth quarter."

UBS Wealth Management, which claims to be the world's largest wealth manager, posted profit before tax of $880 million, up 1% year-on-year.

UBS' share price climbed by around 3% in morning trade in Europe.