UBS is boosting the banking sector in Europe on Tuesday morning, after reporting a better-than-expected first-quarter performance that overshadowed a number of minor disappointments.

At around 10:30 a.m., the stock was up 8%, the biggest gainer on Zurich's SMI, while the STOXX Europe 600 Banks European banking index was up 1.1%.

The Swiss financial group announced this morning that it had posted a net profit of $1.8 billion for the first three months of the year, compared with analysts' expectations of just $600 million.

The good news is that money flows have picked up, with continued strong business activity in wealth management, which added some $27 billion in net new assets.

UBS also reports increased transaction volumes in its private and corporate banking and investment banking businesses.

The bank also claims to have benefited from around a further $1 billion in gross cost savings, which enabled it to reduce its operating expenses by 5%.

Switzerland's number one bank - which expects to finalize its merger with Credit Suisse on May 31 - also reported a CET1 capital ratio of 14.8%, against a consensus of 14.4%.

In a press release, the Group explains that this better-than-expected performance will enable it to achieve its 2024 targets in terms of capital return

Analysts were applauding these figures this morning, starting with RBC, who considered in particular that "the acceleration of cost reductions is a positive element".

While the 2024 objectives in terms of redistribution of 2024 capital were reiterated, no mention was made of those for 2026," the research firm regretted.

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