UBS has disclosed a net profit of $1.4 billion for the third quarter, surpassing expectations thanks to its trading division’s better performance amid heightened market volatility and strategic cost-cutting measures.
Revenue surged to $12.3 billion as the Swiss banking giant experienced notable inflows within its wealth management sector. Chief Executive Sergio Ermotti remarked on the solid revenue growth, attributing success to their proactive approach during periods of market volatility. He noted the bank’s robust clientele momentum, especially in the Americas and Asia-Pacific regions.
The bank’s global wealth management division showed a slight year-on-year increase in revenue to $6.2 billion, as reduced income from interest rates was counterbalanced by a rise in fee income. Investment banking revenue saw a significant uptick of 22 percent, reaching $2.6 billion largely due to the global markets division’s strong results amid increased trading activities.
Having achieved profitability in the first quarter following its acquisition of Credit Suisse, UBS is navigating a three-year integration process intended to be finalised by 2026. This involves client transitions and IT system integrations, with successful migrations already completed in Luxembourg and Hong Kong. Upcoming migrations in Singapore and Japan are planned by year-end and will pave the way for the more substantial Swiss account integrations slated for 2025.
Switzerland’s financial regulator, FINMA, has demanded that UBS enhance its emergency and recovery strategies, reflecting the increased risks post-Credit Suisse acquisition. The bank’s common equity tier one ratio, an indicator of financial resilience, has dipped to 14.3 percent as part of a phased removal of regulatory adjustments tied to the takeover.
While UBS does not foresee the $3.4 billion reduction in CET1 capital impacting its $1 billion share buyback target by year-end, Citigroup analyst Andrew Coombs cautioned that flexibility for buybacks in 2025 has slightly diminished. Early trading on Wednesday saw UBS shares rise by 2.3 percent, reflecting investor confidence in the firm’s ongoing resilience.
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