UBS studies its newest earnings
FABRICE COFFRINI | AFP | Getty Photos
UBS on Tuesday reported a internet earnings of $1.7 billion for the third quarter of this yr, barely above analyst expectations, with the Swiss financial institution citing a difficult atmosphere.
Analysts had anticipated a internet revenue of $1.64 billion, in keeping with Refinitiv information. UBS reported a internet earnings of $2.3 billion a yr in the past.
The Swiss lender had missed expectations within the final quarter when it posted a internet revenue of $2.108 billion. The financial institution stated on the time the second quarter had been “one of many most challenging periods for buyers within the final 10 years” on account of excessive inflation, the struggle in Ukraine and strict Covid-19 insurance policies in Asia.
UBS stated Tuesday these components continued to be in buyers’ minds within the third quarter.
“The macroeconomic and geopolitical atmosphere has develop into more and more complicated. Shoppers stay involved about persistently excessive inflation, elevated vitality costs, the struggle in Ukraine and residual results of the pandemic,” Ralph Hamers, CEO of UBS, stated in an announcement.
Talking to CNBC’s Geoff Cutmore, Hamers stated, nevertheless, that there have been very robust flows into the enterprise over the quarter, with internet new fee-generating belongings at $17 billion.
Different highlights for the quarter included:
- Revenues hit $8.3 billion, down from $9.1 billion a yr in the past.
- Working bills dropped to $5.9 billion, from $6.2 billion a yr in the past.
- CET 1 capital ratio, a measure of financial institution solvency, reached 14.4% versus 14.9% a yr in the past.
Its funding banking division noticed revenues down by 19% with the decrease efficiency in fairness derivatives, money equities, and financing income being offset by revenues in international change. The International Wealth Administration division additionally reported decrease revenues, down by 4% year-on-year.
Nevertheless, Private and Company Banking revenues rose over the identical interval on extra useful charges from the Swiss Nationwide Financial institution.
Hamers famous Tuesday that shoppers on its wealth facet had been searching for different investments and money, and he predicted that exercise on the institutional facet of its buying and selling unit would stay weak within the fourth quarter.
UBS is aiming to enhance its enterprise in Asia-Pacific and CEO Hamers stated he sees “some alternatives to develop” in China.
“The affirmation of [China President] Xi for an additional time period is on one facet mainly the affirmation of consistency going ahead, so a few of the insurance policies that he has come out with during the last yr will almost certainly be continued,” Hamers stated.
He added that the Swiss financial institution appears at China “by advantage of its demographics and a few of the dimensions of the economic system.” “We predict over time it’s a very engaging place, so it’s a strategic place,” he added.
Elsewhere, Hamers expects a “difficult” time for Europe given the continued vitality disaster and struggle in Ukraine.
“Europe could have a difficult interval, a difficult winter though they’ve their reserves,” he stated, including that the Swiss financial institution expects the area to enter a recession.
Shares of UBS are down about 8% thus far this yr.