UBS rode healthy markets first-quarter markets: profits are considerably higher, also thanks to the Swiss bank's spending cuts.

Zurich-based UBS bolstered its net profit in the first three months by 79 percent to 27 billion Swiss francs. How? Revenue rose in all its business areas, expenses were pruned, and the Swiss giant had few one-time effects which might have marred the quarter, it said in a statement on Friday.

UBS said its investment bank, its U.S.-based brokerage and its private bank, the largest in the world by assets, powered the result. The bank kept a lid on spending, paring it back more than seven percent from the fourth quarter to hold roughly steady with the year-ago period's spending. A 375 million franc tax benefit also helped.

The result «highlight the power and potential of our franchise», Chief Executive Sergio Ermotti said in the statement.

Strong European Inflows

UBS' investment bank showed the strongest rise in revenue of all the bank's units, with a 51 percent rise in pre-tax profit to 558 million francs. Wealth management's profit rose 17 percent to 727 million francs.

The bank won 18.6 billion francs of fresh funds from clients, largely from Europe. The net margin edged higher 2 basis points higher on the quarter to 29 basis points.

U.S. Record

Its U.S.-based brokerage attracted first 1.9 billion in the quarter, which is traditionally hit by clients paying tax bills. Profit before tax rose 32 percent to 324 million – a record, according to UBS, due to recurring fees and high interest revenue.

Switzerland's personal and corporate banking showed more modest growth: profit rose 4 percent to 437 million. UBS has been cutting back the unit's costs to offset the effect of absent interest income.

Broadly Optimistic

Profit at UBS' small asset management unit rose 12 percent to 123 million francs. The unit won 19.7 billion francs in net new money in the quarter, thanks to an increasing client preference for passive investing.

The bank was broadly optimistic in its outlook: the bank sees sentiment and confidence among wealthy investors improving, but not yet translating into higher fees and commissions from transactions. UBS warned that factors including «divisive politics» could hit sentiment again, and in turn hamper its transaction volumes.