In addition to reporting the surprisingly strong results the bank announced an overhaul of its legal structure targeted at benefiting shareholders.
Its first quarter profits beat the expectations of analysts polled by the AWP financial news agency, who had anticipated a net profit of 855 million francs.
UBS chief Sergio Ermotti and chairman Axel Weber hailed the result as "a solid performance achieved despite a volatile operating environment."
The bank's sales were meanwhile down seven percent to 7.2 billion francs, slightly lower than analyst expectations.
UBS announced separately that it was creating a new group holding company aimed at making it easier to separate any divisions that might run into difficulties and shield the rest.
The new holding company is to be set up through a share-for-share exchange offer starting later this year if it receives the necessary regulatory approvals.
It is meant to help the bank avoid a repetition of the 2008 crisis, when Switzerland had to step in and save the bank from tanking and dragging the entire Swiss economy down with it.
The new structure should bring the bank in line with Swiss requirements implemented after that crisis to ensure banks do not become "too big to fail", allowing it to cut back on the amount of money it has to set aside to cover any possible losses.
"Following the completion of the transaction, UBS expects to propose a supplementary capital return of at least 0.25 francs per share to shareholders of the new group holding company," the bank said.
At the same time, UBS said it had pushed its cash holding ratio up to 13.2 percent, passing its 13-percent target for all of 2014 and keeping well in line with the global Basel III rules, drawn up after the global financial crisis to make banks reinforce their capital reserves.
"Surpassing the 13-percent . . . ratio target we set two years ago is a major milestone for the firm and its stakeholders," Ermotti said in the earnings statement.
Passing this mark had been one of the preconditions set by the bank for hiking the capital returns it dishes out to shareholders.
Investors welcomed the news, pushing the UBS share price up 0.88 percent to 18.43 francs in mid-morning trading as the Swiss stock exchange's main SMI index rose 0.13 percent.
In its earnings release on Tuesday, UBS said its wealth management division, which it is in the process of expanding, posted a pre-tax profit of 659 million francs, pulling in 10.9 billion in net new cash during the quarter, with the Asia Pacific and emerging markets contributing the most.
Its Americas wealth management activities, which are accounted for separately, notched up a pre-tax profit of $284 million and booked $2.1 billion in new money.
UBS's long struggling investment bank division, meanwhile, posted a pre-tax profit of 549 million francs, it said.