In mid-March, Kirt Gardner, the CFO of UBS Bank (UBS 0.40%), said the bank had seen small amounts of loan losses and felt good with its liquidity position, despite the impact of the coronavirus pandemic .
It was a surprise at the time considering what most banks were experiencing, but it apparently held through the rest of the quarter.
The bank reported first-quarter profits 40% higher than the first quarter of last year. Net income was roughly $1.6 billion, or earnings per share of $0.43, up from roughly $1.1 billion in the first quarter of 2019.
UBS did take a credit loss expense of $268 million in the quarter to prepare for future potential loan losses, which is up from just $20 million in the first quarter of last year.
"As a result of years of disciplined strategic execution, risk management, and sustained technology investments, we enter these turbulent times from a position of strength," UBS CEO Sergio P. Ermotti said in a statement.
The company's global wealth management division and investment bank performed particularly well, with their operating profits up 18% and 30% on an annualized basis, respectively.
While the bank is better positioned for the pandemic than most traditional banks that rely on loans -- because most of its income is from fees and commissions -- it has taken steps to limit certain exposures over the years.
For instance, UBS has reduced its exposure to oil and gas by 75% since 2015, according to an investor presentation, a move that is clearly paying off right now.
The bank also maintained strong liquidity, ending the quarter with a 12.8% common equity tier 1 capital ratio, which is down 90 basis points (or 0.90 percentage points) from the fourth quarter, but only 20 basis points on an annual basis.