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UBS reported a 27% increase in third-quarter pre-tax profit Wednesday, as its wealth business attracted $55.1 billion in net new assets and the bank raised its target for cost savings from the Credit Suisse integration.
The Swiss bank posted reported profit before tax of $3.587 billion and revenue of $13.350 billion, up 5% from a year earlier. Net profit attributable to shareholders rose 8.4% to $2.690 billion, according to its third-quarter results release.
Underlying pre-tax profit increased 14% to $4.077 billion. UBS identifies its underlying results as a non-GAAP financial measure that excludes items management considers unrepresentative of the business’s underlying performance. That adjusted figure is separate from reported profit.
Wealth inflows and trading support results
Global Wealth Management’s $55.1 billion in net new assets included positive contributions from every region, led by Asia-Pacific and the Americas. Group invested assets stood at about $7.3 trillion.
The wealth division’s underlying revenue rose 8% to $6.898 billion. Underlying Global Markets revenue increased 17% to $2.548 billion, with equities revenue up 22%, UBS said.
Cost-savings ambition rises
UBS now expects about $13.7 billion in cumulative gross cost savings by the end of 2026, compared with its previous ambition of about $13.5 billion. It said it had delivered $13.2 billion, including another $600 million in the third quarter.
The bank said the integration remained on track to be substantially completed by year-end. Nearly all legacy Credit Suisse technology applications slated for retirement were no longer in use at September 30, and about 90% had been fully decommissioned.
UBS reported a common equity tier 1 capital ratio of 14.7%. It repurchased $1.8 billion of shares during the quarter and plans to complete its $3 billion buyback program by the time it reports fourth-quarter results. The amount and pace remain subject to performance, capital levels and clarity on Swiss parliamentary deliberations over foreign-subsidiary capitalization.
Seasonal slowdown expected in fourth quarter
UBS expects a typical sequential seasonal moderation in transaction volumes across its businesses in the fourth quarter. It forecast a low-single-digit sequential increase in net interest income in Global Wealth Management, and a slight increase in Personal & Corporate Banking in Swiss-franc terms.
The bank said it remained committed to its diversified global business model and footprint while continuing discussions over Switzerland’s future capital rules.
JBizNews Desk | Zurich
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