The Zurich-based bank posted a net income of CHF707m ($741m) for the March quarter compared to 1.98 billion francs in the same quarter a year earlier.
UBS in a statement said: "Heightened economic and geopolitical uncertainty, as well as global market volatility, led to more pronounced client risk aversion.
"For the industry this translated into abnormally low transaction volumes for a first quarter, and particularly for UBS when compared with the exceptional first quarter of 2015."
Its pretax profit in wealth management division fell to CHF557m in the quarter from CHF951m in the year-ago quarter. Its investment bank division posted a pretax profit of CHF253m compared to CHF766m on year-on-year basis.
The lender’s wealth management services gained CHF15.5 bn in net new money in the quarter, up 6.5% compared with CHF14.4bn in the same quarter in 2015.
Its personal and corporate banking division posted an operating profit before tax of CHF399m in the January-March quarter compared to CHF355m in the previous quarter. It noticed an increase despite continued challenges arising from negative interest rates and the slowdown in economic activity.
The firm said that some of negative factors that hurt its business in the quarter have recently shown a stabilisation.
UBS said: "But the underlying macroeconomic challenges and geopolitical risks highlighted previously continue to contribute to client risk aversion and are unlikely to be resolved in the foreseeable future."
The bank sees risks from low interest rates and the relative strength of Swiss franc, particularly against the euro.
UBS is expected to face increased capital requirements and costs in the coming months, as a result of proposed changes to the Swiss and international regulatory framework for banks.
Image: UBS New York, USA, Avenue of the Americas. Photo courtesy of UBS.
