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    UBS Profit Misses Estimates on Lower Wealth, Trading Income

    UBS Group AG said first-quarter profit plunged 64 percent, missing analyst estimates, as market turbulence eroded earnings at the wealth-management and securities units.

    Net income declined to 707 million Swiss francs ($741 million) from 1.98 billion francs a year earlier, the Zurich-based bank said on Tuesday. That fell short of the 735 million-franc average estimate of five analysts in a Bloomberg survey. At the investment-banking unit, led by Andrea Orcel, profit slumped 67 percent to 253 million francs in that period.

    Chief Executive Officer Sergio Ermotti, 55, who has shifted the bank’s focus away from investment banking in favor of wealth management, is struggling with market volatility that led to a slump in trading across the firm. While there have been some signs of improvement, economic challenges and geopolitical risks continue to contribute to client risk aversion and “are unlikely to be resolved in the foreseeable future,” the lender said.

    “We definitely entered into a kind of new territory in the first quarter,” Ermotti said in an interview with Bloomberg Television’s Guy Johnson. “The first quarter was an environment that had only one constant -- risk aversion from January 1 until the end of the quarter.”

    UBS shares dropped as much as 4.1 percent and traded at 15.87 francs at 9:06 a.m. in Zurich, down 4 percent. They have tumbled about 19 percent this year, while Credit Suisse Group AG has lost 34 percent.

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