Portfolio

UBS Q3 profits fall but beat expectations

By Duncan Ferris

Date: Tuesday 22 Oct 2019

UBS Q3 profits fall but beat expectations

(Sharecast News) - UBS on Tuesday reported a fall in third quarter profit as earnings from all its operations except asset management declined, with the company blaming a "challenging environment".
The Swiss investment bank and financial services outfit booked a third quarter profit before tax of $1.35bn, 21% down on the same period last year, though this was ahead of analyst expectations.

Net profit attributable to shareholders was 16% lower than last year's third quarter, coming in at $1.05bn.

Profit before tax at UBS' investment banking arm dived by 59% to $203.0m as the division faced tough comparatives and saw revenues driven lower by a 19% reduction in income from corporate client solutions, which the company attributed to a reduction in global fee pools.

UBS expects to take a $100.0m hit from restructuring the division during the fourth quarter.

Meanwhile, the global wealth management (GWM) and personal & corporate banking segments saw pretax profits contract by 2% and 10% respectively.

The asset management division was the company's sole area of growth, with profit before tax rising by 6% to $135.0m as net management fees increased by $12.0m on the back of higher average invested assets.

UBS warned that geopolitical tensions and trade disputes have continued to impact investor confidence, adding that low or negative interest rates and expectations of further monetary easing will adversely affect net interest income compared with the prior year.

However, the company commented that its regional and business diversification will help to mitigate these headwinds.

Chief executive Sergio Ermotti said: "We delivered solid results generating attractive returns, considering the market conditions. We continue to take actions to grow profitability and further capitalize on the strengths of our diversified franchise, delivering long-term value for our clients and shareholders."

UBS shares were up by 1.62% at CHF11.63 at 1116 BST.

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