Weakness in investment banking and wealth management
UBS kicks off European bank earnings
Investment bank revenue down 14
Shares down as much as 6

ZURICH, July 26 Reuters UBS posted a smallerthanexpected quarterly profit as turmoil in financial markets hurt its investment banking and wealth management businesses, with analysts predicting the Swiss bank will see harsh conditions in the second half as well.

The Zurichbased bank kicks off a round of earnings by major lenders across Europe, where analysts are watching for signs that a weaker economy, higher interest rates and the war in Ukraine are weighing on their operations and outlooks.

UBS39; net profit in the three months ended June rose 5 to 2.1 billion. That compared with 2.0 billion a year earlier and lagged expectations for a 19.8 rise to 2.4 billion, in a poll of 19 analysts compiled by the bank. Shares fell as much as 6.

The second quarter was one of the most challenging periods for investors in the last 10 years, Chief Executive Ralph Hamers said in a statement. He said the operating environment in the second half of the year remains uncertain.

UBS39; performance comes after some U.S. rivals earned less money overall in the quarter due to drops in dealmaking and the selling of investment products. JPMorgan Chase Co and Morgan Stanley both reported that investment banking revenues more than halved.

Earnings at UBS were helped by the sale of a real estate joint venture in Japan that yielded a oneoff…