'Abnormally low': Here's how UBS, BNP Paribas, and Commerzbank did in a tough first quarter

A slew of European investment banks put out first quarter earnings on Tuesday and it's a mixed bag.

While several beat analysts' forecasts, the overall theme is a big drop off in profits from last year, signaling just how tough the market is right now.

Here's the breakdown:

• UBS: Net profit of Swiss francs 707 million (£504.9 million, $741 million), in line with estimates but well below last year's figure of Swiss francs 1.98 billion (£1.4 billion, $2 billion).
• BNP Paribas: Net profit of €1.8 billion (£1.41 billion, $2.08 billion), beating forecasts and up from €1.6 billion in the same quarter last year. Net income up 10.1%, but revenue down 2%.
• Commerzbank: 52% drop in first-quarter net profit to €163 million (£128 million, $188 million).
• HSBC: Pre-tax profit of $6.1 billion (£4.1 billion), down from $7.1 billion (£4.8 billion) a year earlier but above forecasts of $4.3 billion (£2.9 billion).

All of the banks flag "difficult market conditions". Here's UBS on why the first quarter was so tough (emphasis ours):

In the first quarter of 2016, heightened economic and geopolitical uncertainty, as well as global market volatility, led to more pronounced client risk aversion. For the industry this translated into abnormally low transaction volumes for a first quarter, and particularly for UBS when compared with the exceptional first quarter of 2015.

And here's BNP Paribas who, remember, actually had an expectation-beating quarter (again, emphasis ours):

At 1,318 million euros, Global Markets' revenues were down by 24.4% compared to the first quarter 2015 due to a wait-and-see attitude by investors during the first two months of the year: concerns over global growth and on banking regulations combined with uncertainties over monetary policies.

It looks like the first quarter isn't just a flash in the pan either. UBS points out that the "underlying macroeconomic challenges and geopolitical risks highlighted previously continue to contribute to client risk aversion and are unlikely to be resolved in the foreseeable future."

Rates are still low with no sign of them rising. Central bank stimulus policy looks to be running out of gas. China is a massive growth question mark. And increasing banking regulation means costs are only likely to go up. Buckle up.