UBS studies its finest third quarter for a decade, with a 99% hike in web revenue

The brand of Swiss banking big UBS engraved on the wall is seen on its headquarters on May 8, 2019 in Zurich.

Fabrice Coffrini | AFP | Getty Images

LONDON — The world’s largest wealth supervisor, UBS, reported a leap in web earnings to $2.1 billion for the third quarter on Tuesday, simply beating analyst expectations. It marks a 99% leap from the identical interval a 12 months earlier.

“It could be very troublesome to not be proud of this set of numbers as a result of they’re coming from an excellent contribution from all enterprise models,” CEO Sergio Ermotti informed CNBC’s Geoff Cutmore Tuesday.

Analysts had anticipated the Swiss financial institution and asset supervisor to report $1.5 billion of web earnings for the third quarter, based on information from Refinitiv Eikon. It comes after an 11% drop in revenue for the second quarter, as the worldwide banking business felt the total impact of the coronavirus pandemic.

“We converse rather a lot about stimulus and Covid-related issues, however the geopolitical uncertainties in Europe, and in addition within the Sino-U.S. relationship, (are) nonetheless there they usually’re there to remain so we should not underestimate that,” Ermotti added.

UBS mentioned pre-tax revenue for the third quarter rose 92% to $2.6 billion, in what it described as its finest third-quarter lead to a decade.

The Swiss lender’s outcomes are the primary of Europe’s banks. Analysts expect a better quarter for the sector following a troublesome first half off the again of the coronavirus outbreak and financial disaster.

Here are different highlights of the quarter:

  • Operating revenue hit $8.9 billion, versus $7.08 billion a 12 months in the past
  • CET 1 capital ratio reached 13.9%, versus 13.1% a 12 months in the past

Pre-tax revenue in UBS’ funding financial institution rose 268%, on the again of market volatility within the wake of the coronavirus disaster. While its wealth administration division posted an 18% rise in revenue earlier than tax, and whole invested belongings hit an all-time excessive of $2.75 billion.

The financial institution attributed its outcomes to ongoing robust consumer exercise and the “advantages of a well-diversified enterprise mannequin with broad regional combine.”

Speaking to CNBC, Ermotti mentioned: “The quantity of visibility could be very restricted, however this has probably not modified in the previous couple of years and months. I feel what we’re doing is staying very agile and staying very targeted on our plan.”

From a geographical standpoint, Ermotti additionally mentioned that the U.S. and Asia “supply greater and larger progress alternatives” than Europe, including that the latter wanted to implement extra structural reforms and regain competitiveness.

Tuesday’s outcomes are UBS’ final below the management of Ermotti, who is because of depart the financial institution this month. Ralph Hamers will turn into the brand new head on Nov. 1.

“UBS has all of the choices open to put in writing one other profitable chapter of its historical past below Ralph’s management,” Ermotti mentioned in a press release accompanying the outcomes.

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