Yesterday was UBS’s results day. The Swiss bank did very well. It increased profits by 760% in the core investment bank (although compensated for this by making some big losses in the legacy investment bank) and paid everyone more money. In the words of chief executive Sergio Ermotti, UBS is now closing the gap that had opened up between itself and other investment banks when it comes to pay.
Over at Deutsche Bank, things aren’t so happy. As we reported last week, Deutsche has cut spending on pay for its investment bankers by 14% and is having some issues with its core fixed income sales and trading business.
Analysts at Deutsche have looked across to UBS’s investment bank and decided that they like what they see. The two charts below illustrate why (UBS is taking market share and generating a handsome return on equity).