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UBS has reported net profit of $1.4bn for the third quarter, smashing expectations as the Swiss bank’s trading business benefited from increased market volatility and cost cutting.
Profit for the quarter was almost double analysts’ forecasts on revenues that rose to $12.3bn as the lender’s wealth management business attracted inflows.
“Against a market backdrop that, while constructive, still exhibited periods of high volatility and dislocation, our businesses delivered impressive revenue growth,” chief executive Sergio Ermotti said on Wednesday, adding that the bank had “maintained strong client momentum”, particularly in the Americas and the Asia-Pacific region.
Revenues at the lender’s key global wealth management division were up slightly year on year to $6.2bn as lower income from interest rates was offset by higher income from fees. Meanwhile, revenues at the investment bank were up 22 per cent to $2.6bn, helped by strong performance from its global markets division assisted by higher trading volumes resulting from market volatility.
UBS returned to profitability in the first quarter of this year following its rescue of crosstown rival Credit Suisse at the behest of Swiss regulators. The bank is still in the middle of a three-year integration during which it will have to migrate clients and integrate IT systems, a lengthy process that UBS expects will be completed in 2026.
UBS said it had successfully completed the first wave of client account migrations in Luxembourg and Hong Kong, with Singapore and Japan expected to move over into its systems by the end of the year. Those will be a test case for the migration of Swiss accounts, a much larger cohort, in 2025.
Switzerland’s financial regulator Finma this month ordered UBS to bolster its emergency and recovery plans given the greater risks taken on with the acquisition of Credit Suisse.
The bank’s CET1 ratio, which compares its core capital with its risk-weighted assets and indicates its financial resilience, fell to 14.3 per cent as it phased out a regulatory adjustment related to its Credit Suisse takeover.