We are executing relentlessly for our clients: Our clients continued to put their trust in us as was evident from the continued momentum in flows and volume growth. Together with favorable market conditions and investor sentiment, this led to growth across the firm. Invested assets in GWM and AM of USD 4.4trn rose 4% sequentially, GWM saw USD 25bn of net new fee-generating assets with inflows in all regions, and there was USD 8bn in net new lending across GWM and Personal Banking, while strong client activity drove YoY increases of 16% in transaction-based income in GWM and 68% in Global Banking income.
We are delivering on our strategic initiatives to drive growth and efficiency: During 1H21, we facilitated more than USD 18bn of investments into private markets from private and institutional investors, helping our private clients benefit from our scale to get institutional-level access and pricing. Sustainability remains an important topic for our clients and for us, and our Sustainable Investing mandate in GWM attracted USD 8bn of net inflows in 1H21, while invested assets with a sustainability or impact focus in AM increased by 33% since year-end 2020. Our integrated SMA offering in the US continues to attract inflows, as do our mandates through My Way. Regionally, we are focusing on capturing growth in the largest and fastest growing markets: the US and APAC.
We are committed to driving higher returns by unlocking the power of UBS: PBT was USD 2,593m (up 64% YoY), including net credit loss releases of USD 80m. The cost/income ratio was 71.8%, 4.1 percentage points lower YoY. Operating income increased by 21% YoY, while operating expenses increased by 10%. Net profit attributable to shareholders was USD 2,006m (up 63% YoY), with diluted earnings per share of USD 0.55. Return on CET1 capital1 was 19.3%. The quarter-end CET1 capital ratio was 14.5% (guidance: ~13%) and the CET1 leverage ratio was 4.09% (guidance: >3.7%), both up QoQ. We repurchased USD 1.4bn of shares in 1H21 under our share repurchase programs. We intend to repurchase USD 0.6bn of shares during 3Q21.
1 Return on CET1 capital is calculated as annualized net profit attributable to shareholders divided by average common equity tier 1 capital.
First quarter 2021
1Q21 net profit of USD 1.8bn, 18.2% return on CET1 capital
Building on client connectivity through advice, solutions and thought leadership in a dynamic environment: Our clients continued to put their trust in us and benefitted from the full spectrum of our business mix and geographical diversification. This, together with favorable market conditions and investor sentiment, led to higher recurring revenues YoY, while strong client activity drove transaction income, as well as an increase in lending across our businesses.
1Q21 financials: PBT was USD 2,298m (up 14% YoY), including net credit loss releases of USD 28m. The cost/income ratio was 73.8%, 1.5 percentage points higher YoY. Operating income increased by 10% YoY, while operating expenses increased by 8%. Net profit attributable to shareholders was USD 1,824m (up 14% YoY), with diluted earnings per share of USD 0.49. Return on CET1 capital1 was 18.2%. The default by a US-based client of our prime brokerage business resulted in an impact on net profit attributable to shareholders of USD 434m.
Our strong capital position supports growth and shareholder returns: The quarter-end CET1 capital ratio was 14.0% (guidance: ~13%) and the CET1 leverage ratio was 3.89% (guidance: >3.7%), both up QoQ. We paid the 2020 ordinary dividend of USD 0.37 per share in April 2021 (USD 1.3bn) and we repurchased USD 1.1bn of shares year-to-date. We will resume repurchasing shares shortly.
Unlocking the power of UBS: We have unveiled our purpose statement: Reimagining the power of investing. Connecting people for a better world. Our purpose – together with our new strategic framework consisting of our vision, client promise, strategic imperatives, and sustainability commitments – maps out the next steps in our firm’s journey.