Europe’s largest banks continued a recent trend of solid trading-driven earnings growth in the second quarter, following gains reported by major Wall Street institutions. UBS and Deutsche Bank both posted higher profits as strong investment banking revenues and robust client activity helped lift their results.

UBS reported a 17% increase in net profit for the quarter ended June 30, reaching $2.8 billion. The Swiss lender’s investment bank achieved record revenues during the period, primarily fueled by equities trading. Underlying pre-tax profit in the investment banking division more than doubled to $1.2 billion. Meanwhile, UBS’s wealth management segment also performed strongly, attracting $36 billion in net new assets, including positive inflows from the U.S. despite typical seasonal tax-related withdrawals.

Chief Executive Sergio Ermotti described the bank’s investment banking performance as “exceptional” but cautioned that risks remain elevated, with market conditions capable of shifting quickly and affecting client sentiment. Ermotti pointed to Asia as a key growth area, noting that the region contributed roughly one-third of the group’s pre-tax profit and supported robust asset inflows under UBS’s “one bank” strategy.

UBS additionally reported $1.1 billion in cost savings from its ongoing integration of Credit Suisse, which it acquired in 2023. Cumulative savings have now reached $12.6 billion as the combined group moves towards finalizing the merger. The bank’s return on common equity tier one capital, an important measure of profitability, stood at 15.4% in the quarter, down slightly from 16.8% in the first quarter. Ermotti acknowledged the challenging process of integrating Credit Suisse, saying the bank was starting to realize benefits from nearly three years of restructuring and difficult decisions.

Deutsche Bank posted a 10% rise in net profit to €1.9 billion, up from €1.7 billion in the same period last year and ahead of analyst forecasts. The German lender’s investment bank was the primary driver, where pre-tax profit climbed 59% to €1.3 billion. Gains were largely driven by strong revenues from rates and credit trading linked to U.S. market activity. Deutsche Bank’s performance in bonds, rates and credit trading outpaced many U.S. peers; however, its equities and advisory businesses experienced slower growth, reflecting the bank’s gradual withdrawal from parts of its equities operations since 2019.

The positive results from UBS and Deutsche Bank parallel those reported by several major Wall Street banks, including Goldman Sachs and JPMorgan, which similarly benefited from heightened market volatility and increased trading volumes, particularly related to artificial intelligence-linked stocks and significant fluctuations across equity markets. There was also noted growth in financing demand from trading clients, especially in Asia.

Overall, the second-quarter earnings reports underscore a favorable environment for investment banking activities across major financial hubs, supported by elevated client engagement despite ongoing market uncertainties.