Adjusted operating income declined 4 per cent year-on-year to SFr7.2 billion as the bank incurred net foreign currency translation losses of SFr26 million and losses on sales of subsidiaries and businesses of SFr23 million. Adjusted operating pre-tax profit of SFr1.67 billion was up slightly from SFr1.64 billion in the corresponding period of 2015.

The bank highlighted that the backdrop of continued economic and heightened geopolitical uncertainty led to “ongoing and pronounced low client activity, and subdued primary market issuance”. Risk-weighted assets were stable from the prior quarter at SFr214 billion despite ongoing regulatory inflation, it said.

UBS's wealth management business generated an adjusted pre-tax profit of SFr606 million, down by SFr163 million from a year earlier due to more “subdued” client activity. The unit attracted net new money of SFr6 billion, driven by strong net inflows from Asia-Pacific and Switzerland, though this was partly offset by cross-border outflows in emerging markets and Europe.

In the Americas, wealth management pre-tax profit was up 22 per cent year-on-year at $281 million 
thanks to record net interest income and lower operating expenses.

The asset management division posted a pre-tax profit of SFr114 million, down from SFr130 million in the second quarter of 2015, following net outflows of SFr7.7 billion.

UBS said it hit its net cost savings target of SFr1.4 billion, moving towards its SFr2.1 billion 2017 year-end target, while absorbing “substantially higher” regulatory costs. According to a recent Bloomberg report, UBS has imposed a partial hiring freeze, applying to support functions at its wealth management business to cut costs further.

The bank posted a common equity tier one capital ratio of 14.2 per cent and a CET 1 leverage ratio of 3.4 per cent as at the end of June 2016.

“We achieved this strong result by helping our clients navigate continued difficult market conditions, while staying disciplined on risk and further reducing cost. UBS remains in a solid position with strong capital, strategic clarity and a well-diversified business model,” group chief executive Sergio Ermotti said in a statement today.

UBS remains the world’s largest wealth management house by assets, with $1.737 trillion of assets under management, ahead of Bank of America Merrill Lynch with $1.444 trillion, and Morgan Stanley with $1.439 trillion, according to a recent study by consultancy Scorpio Partnership.