- Several European banks reported better-than-expected profits amid market volatility in early 2025.
- The uncertainty and fast-moving news cycle around Trump's tariffs led to huge market swings in Q1.
- UBS, Barclays, Deutsche Bank, and HSBC all say they benefited from increased trading activity.
Since President Donald Trump announced his "Liberation Day" tariffs, the stock market has been rocked by historic levels of volatility.
Market turbulence, while disruptive, hasn't been all bad news. Several European banks said in recent earnings that massive market swings benefited their trading operations.
UBS, Barclays, Deutsche Bank, and HSBC all reported better-than-expected profits in their most recent quarters, with all four lenders mentioning the boost provided by tariff-driven volatility.
UBS
Swiss powerhouse UBS reported net profits of $1.7 billion in the first quarter of 2025, surpassing analyst estimates of $1.3 billion.
"The power and scale of our diversified global franchise, coupled with our continued focus on clients, drove strong business momentum in the quarter and net new inflows in our asset-gathering businesses," CEO Sergio Ermotti said in a statement on Wednesday.
The Swiss investment bank said revenues rose 32% in its global markets unit.
"The second quarter kicked off the unveiling of significant changes to tariffs on trading partners by the US administration, increased uncertainty, and market volatility," Ermotti told investors on the earnings call.
"The investments we have made to reinforce our infrastructure are paying off with our operations proving stable and resilient as we facilitate client activity across asset classes," he said.
Barclays
Barclays reported an unexpected 19% jump in pre-tax profit in the three months ending March 31.
The London-headquartered bank increased its guidance for income from £12.2 billion ($16.30 billion) to £12.5 billion for 2025.
The group saw an 11% rise in income, thanks in part to market turbulence.
"In the past, Barclays has drawn fire for its investment banking division and its role within the group has been heavily questioned," Russ Mould, investment director at AJ Bell, said in a note.
"This part of the business shone in the first quarter as increased market volatility provided its trading operations with a major boost."
Deutsche Bank
German investment bank Deutsche Bank posted a 39% lift in pre-tax profits to 2.8 billion euros ($3.18 billion) in its most recent quarter.
Revenues advanced 10% year-on-year to 8.5 billion euros.
"We are very happy with first-quarter results, which put us on track for delivery on all our 2025 targets," CEO Christian Sewing said in an accompanying statement.
"Our best quarterly profit for fourteen years, achieved through revenue growth combined with lower costs, demonstrates that our Global Hausbank strategy is working well."
"The global banking industry may be impacted by a weakening real economy in 2025 due to escalating trade tensions but should be less severely affected than many other industries," Deutsche Bank said in its first quarter earnings report, adding that credit losses could increase, and mergers and acquisitions activity may slow, affecting investment banking and asset management.
"By contrast, trading business could benefit from higher volatility," it said.
HSBC
HSBC also beat analyst estimates in its first quarter.
The financial services firm posted a profit before tax of $9.5 billion compared to forecasts of $7.8 billion. It surpassed expectations of revenue by $980 million.
The British universal bank announced a share buyback of up to $3 billion.
"Revenue increased due to growth in wealth in our IWPB [international wealth and premier banking] and Hong Kong business segments, supported by higher customer activity, and in foreign exchange and in debt and equity markets, driven by volatile market conditions," HSBC said in its earnings report.
"Volatility has definitely benefited us in this quarter, so it may not repeat at the very high levels that we've seen in this quarter, but we are still continuing to see underlying growth as we have progressed through in quarter two," Pam Kaur, chief financial officer at HSBC told investors in an earnings call.
