Tuesday morning saw a significant increase in UBS shares as a result of the outstanding underlying profit performance of the massive Swiss financial institution, which surpassed forecasts. Above consensus estimates, the bank declared an underlying operating profit before tax of $844 million.
In Europe, UBS shares had increased 3.2% by midafternoon. But after accounting for $2 billion in costs associated with integrating the fallen rival Credit Suisse, UBS revealed a higher-than-expected $785 million net loss for the third quarter that was due to shareholders.
According to a Reuters survey, analysts had projected a $444 million quarterly net loss. Principal Aspects: Group revenues as a whole came to $11.7 billion, up 23% from $9.54 billion in the second quarter. As a gauge of bank liquidity, the CET1 capital ratio stayed constant at 14.4% from the previous quarter.
UBS Global Wealth Management received $22 billion in total inflows, while Credit Suisse Wealth Management contributed to positive net new money inflows. Sergio Ermotti, the CEO of UBS, emphasized the steady advancements in the underlying performance of Wealth Management, Asset Management, and Personal and Corporate Banking in Switzerland during a CNBC interview.
Ermotti observed quarter-over-quarter growth in several areas. Even though the investment bank had to deal with difficult market conditions, especially when integrating resources from Credit Suisse, Ermotti highlighted a successful quarter marked by advancements in integration plans and robust customer inflows.
The $844 million underlying profit before tax number was praised by Citi analysts, who pointed out that it surpassed both consensus and company forecast. They retained a Buy/High Risk rating and described the study as “overall a good set of results”. After completing the acquisition of Credit Suisse in June, UBS canceled the public liquidity backstop and loss protection agreement in August.
After the bank reported a $28.88 billion net profit in the second quarter, despite negative goodwill from the Credit Suisse acquisition, its shares had reached their highest point since late 2008. UBS is still up more than 27% for the year, even though the stock price has somewhat moderated since then.
The bank hopes to achieve gross cost reductions of at least $10 billion by 2026 and is still working to integrate Credit Suisse’s Swiss banking division.
