Reuters
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UBS stated third-quarter web revenue surged 74%, comfortably beating expectations as income shot larger on monetary market volatility brought on by world tariff turmoil, in addition to renewed M&A exercise.
Switzerland’s largest financial institution additionally stated it was assured in its plans for $3 billion in share buybacks this 12 months and its monetary targets for 2026. It famous, nevertheless, that macro uncertainties, a powerful Swiss franc and better US tariffs had been clouding the outlook for the Swiss economic system. Shares in UBS rose 2.5% in morning commerce.
UBS (UBS) expects deal exercise to stay wholesome in the fourth quarter, however stated “sentiment can shift quickly as confidence in the outlook is tested.”
A chronic US authorities shutdown might delay capital market actions, it added.
UBS additionally stated it intends to enchantment a Swiss courtroom choice, already challenged by Swiss market regulator FINMA, that the writing off of 16.5 billion Swiss francs in Credit Suisse bonds was illegal. The financial institution has no plans to make any provisions in relation to the case, UBS stated.
Net revenue got here in at $2.5 billion. That trumped a consensus estimate of $1.29 billion and marked its greatest outcome since one-off components associated to the combination of former rival Credit Suisse led to a revenue of over $27 billion in the second quarter of 2023.
A launch of authorized provisions value $688 million additionally contributed to the earnings beat. They had been primarily associated to the decision of Credit Suisse’s residential mortgage-backed securities enterprise and a UBS case in France.
UBS attracted $38 billion in web new cash to its world wealth administration division and $18 billion to asset administration, bringing whole invested belongings near $7 trillion.
Strong inflows from Asia greater than offset outflows in the Americas, the place UBS this week utilized for a US banking license.
In UBS’s funding banking division, revenues jumped 52% year-on-year in world banking and 14% in buying and selling, marking a document third quarter for each these enterprise areas as deal-making exercise resumed.
Integration of Credit Suisse additional progressed, UBS stated, including that over two-thirds of Swiss-booked shopper accounts have been migrated.
Citi analysts wrote in a be aware that whereas UBS had delivered a powerful set of outcomes, there was nonetheless a scarcity of readability surrounding its future enterprise mannequin given stress inside Switzerland on the financial institution to extend its core capital ranges by some $24 billion – a measure aimed toward defending the nation ought to the financial institution run into difficulties.
The financial institution, which has been lobbying to melt these necessities, stated it will proceed to contribute to the controversy on banking regulation in Switzerland with out offering additional element.
Reuters reported final month that Switzerland and UBS are, in personal, signaling a willingness to compromise on capital guidelines, probably paving the way in which for parliament to choose decrease necessities acceptable to the federal government and the financial institution.