Swiss banking giant UBS Group reported Wednesday a 5% year-on-year increase in its third-quarter revenue to $12.3 billion, driven by robust transaction-based activity and recurring fee income.
Third-quarter results
UBS posted a net profit of $1.4 billion in the quarter, while diluted earnings per share (EPS) was $0.43, according to a bank statement. Operating profit before tax was $1.9 billion, against a loss of $184 million in the same period last year.
The net profit compares with a forecast of $667.5 million by an LSEG poll of analysts, while revenue compares with a forecast of $11.8 billion, according to CNBC.
UBS shares prices were volatile on Wednesday, recording a 1.05% decline to $32.5 (CFH 28.17) around 1:36 PM AST.
“Against a market backdrop that, while constructive, still exhibited periods of high volatility and dislocation, our businesses delivered impressive revenue growth as we maintained strong client momentum, particularly in the Americas and APAC,” said Group CEO Sergio P. Ermotti.
The Swiss bank said the group’s invested assets were $6.2 trillion, an increase of 15% year-on-year. It also reported $25 billion of net new assets (NNA) in Global Wealth Management, on track to deliver its target of $100 billion in NNA for 2024.
The bank expects to complete its planned $1 billion share buyback in the fourth quarter of the year and intends to continue repurchases in 2025.
UBS returned to profit in the first quarter of 2024 after two-quarters of losses related to the acquisition of Credit Suisse.
Acquisition of Credit Suisse
The strong performance comes after the bank completed its first wave of client migrations following the integration of its former rival, Credit Suisse.
“We continue to significantly mitigate execution risk as we progress on the integration of Credit Suisse while remaining disciplined in driving our cost and efficiency targets,” Ermotti added.
In May, UBS announced it had completed the takeover of Credit Suisse, succeeding all the rights and obligations of the latter, including all outstanding debt instruments of the bank. The takeover was part of a $3.2 billion deal brokeredby Swiss authorities in March 2023 in response to the bank’s financial difficulties and loss of investor confidence.
The takeover left Switzerland with a single global bank, which boasts a balance sheet around twice the size of the country’s gross domestic product (GDP). This made it more important to put plans in place in case something went wrong, to keep Swiss banks safer.
This prompted the Swiss Financial Market Supervisory Authority (FINMA) to require UBS to revise its recovery and emergency plans earlier in October, following the recent acquisition.
