UBS, which has lagged its peers in terms of revenues and share price over the past two years, is likely to outperform its European rivals due the shape of its investment bank, according to analysts at Morgan Stanley.

The bank analyst team, led by Huw Van Steenis, said the strength of Swiss bank in equities and its predicted growth in its foreign exchange business will stand UBS in good stead. It predicted that these are the businesses that will grow profits for European banks, especially as they will use up far less capital under new regulatory rules.