Switzerland’s largest financial institution reviews robust transactional exercise in its core enterprise and expects to attain its goal of $100 billion in web new belongings by the tip of the 12 months.
UBS is popping the upheavals and drama of 2023, and its fraught government-prompted takeover of Credit score Suisse, right into a dim nationwide reminiscence receding within the rearview mirror of Swiss enterprise historical past.
In its third-quarter advert hoc announcement launched on Wednesday, the financial institution reported an underlying pre-tax revenue of $2.4 billion, which it mentioned was an ample indication of the power of its consumer franchises.
Total, group revenues have been up 5 p.c year-on-year however gained 9 p.c on an underlying foundation, with the aforementioned transactional exercise recurring payment earnings greater than offsetting the anticipated headwinds impacting web curiosity earnings after key central banks began chopping rates of interest within the quarter.
Invested belongings have been up 15 p.c at $6.2 trillion because it skilled «continued consumer momentum» with $25 billion in web new belongings in its core international wealth administration enterprise, placing it on «on observe» to ship its ambition of bringing in $100 billion in web new belongings for the entire of 2024.
Total, the market surroundings remained constructive within the third quarter but in addition confirmed «indicators of dislocation and volatility».
UBS generated $15 billion in web new fee-generating belongings and noticed robust discretionary mandate gross sales in all areas regardless of continued pricing self-discipline.
It additionally recorded robust transactional exercise in international wealth administration and the funding financial institution, with the previous’s revenues up virtually a fifth (19 p.c) with the latter gaining by virtually a 3rd (31 p.c).
The excessive ranges of transactional exercise got here from each non-public and institutional shoppers, with international wealth administration seeing robust momentum in all areas led by the People and the Asia Pacific (APAC).
In its funding financial institution, the worldwide markets enterprise noticed positive factors additionally coming from all areas, however «notably» within the Americas. The worldwide banking enterprise skilled robust M&A performances in Asia and the US. In UBS’s Swiss residence market, it granted or renewed round 35 billion francs in loans.
Past that, it indicated that many aspects of its integration with Credit score Suisse, the nation’s erstwhile second-largest financial institution, remained on observe. It accomplished the primary wave of consumer migrations in Luxembourg and Hong Kong this month. Singapore and Japan are anticipated to be finalized by the tip of the 12 months, with Switzerland up in 2025.
It’s on course to succeed in the anticipated $7.5 billion in price cuts this 12 months after it managed to understand a further $800 million in financial savings within the third quarter, with an additional $5 billion in risk-weighted asset reductions in non-core and legacy forward of plans.
In consequence, it expects to be able to save lots of about $13 billion (gross) by the tip of 2026.
It additionally maintained that it could full $1 billion in share repurchases within the fourth quarter and it intends to maintain making them in 2025 though that may depend upon the nation’s overview of its capital regime necessities.
It additionally introduced a number of AI initiatives to learn shoppers and staff, together with a brand new proprietary AI assistant for 20,000 staff in Switzerland, Hong Kong, and Singapore with «straightforward» entry to product data and funding analysis.
Within the funding financial institution, it’s piloting a proprietary AI algorithm that researches and compiles M&A buy-side targets.
UBS indicated that it expects a continuation of the present market developments within the fourth quarter given expectations for a tender touchdown within the US economic system regardless of macroeconomic situations remaining clouded elsewhere on this planet.
Within the fourth quarter, we anticipate a mid-single digit decline in web curiosity earnings in International Wealth Administration and a low single-digit decline in Private & Company Banking. Non-core and legacy is predicted to generate a quarterly pre-tax loss consistent with our earlier steerage, the financial institution indicated.
