(Reuters) -UBS on Wednesday posted better than expected first-quarter net profit, but the Swiss bank warned of an uncertain outlook as U.S. tariffs raise global growth fears even as the market tumult drove up earnings in its trading activity.

Switzerland's biggest bank reported net profit attributable to shareholders of $1.7 billion in the first quarter of 2025, down from $1.8 billion a year earlier, but beating an average estimate of $1.3 billion in a company-provided poll of analysts.

In its investment banking division, global markets enjoyed a record quarter with revenues up 32% year-on-year, underpinned by higher client activity in equities and foreign exchange, UBS said.

The outlook was more muted, however, as the backdrop of U.S. President Donald Trump's sweeping tariffs raised uncertainty. "The prospect of higher tariffs on global trade presents a material risk to global growth and inflation, clouding the interest rate outlook," UBS said.

UBS expected net interest income in its global wealth management business to decline sequentially by a low-single-digit percentage in the second quarter of 2025 and anticipated a similar decline in its Swiss business.

Continued market uncertainty could delay corporate deals, the bank added.

The bank reconfirmed its share repurchase program for 2025, saying it had bought back $0.5 billion in shares in the first quarter and reserved another $2.5 billion for the remainder of the year, despite the uncertain outlook.

The market turmoil comes on top of plans by Swiss authorities to make UBS hold more capital, which have weighed on the bank's shares, with government proposals for a banking regulation overhaul expected in June.

Authorities have pledged to draw up stricter banking regulations to prevent a repeat of the meltdown of Credit Suisse in 2023, which was acquired by UBS in an emergency takeover.