UBS Group AG on Tuesday said its third-quarter profit and revenue beat expectations amid a challenging market, as higher interest rates partly offset the impact of lower client activity at its key wealth-management business.
The Swiss bank
reported a quarterly net profit of $1.73 billion, above company-compiled consensus expectations of $1.53 billion, but down from $2.28 billion in the same period last year.
Revenue tumbled 10% to $8.24 billion in the three months to the end of September, but still beat consensus expectations of $8.16 billion.
With rising interest rates, the Zurich-based company posted a 14% on-year increase in net interest income across its wealth-management division and at its Personal & Corporate Banking operations.
However, at its investment-banking arm, revenue slumped 19%, dragged by its Global Banking business where revenue dived to $329 million from $792 million.
Chief Executive Ralph Hamers said the macroeconomic and geopolitical environment had become increasingly complex, with clients concerned about persistently high inflation, elevated energy prices, the war in Ukraine and residual effects of the Covid-19 pandemic.
“The impact of all this has been far-reaching–affecting asset levels, market volatility, rates and investor sentiment across the globe,” he said.
Despite the challenges, UBS said it had $17.1 billion in net new fee-generating assets at Global Wealth Management and $17.9 billion in new money at Asset Management in the quarter.
However, quarterly revenue fell 4% at GWM and 13% at AM, reflecting negative market performance and foreign currency effects, UBS said.
Its common equity Tier 1 capital ratio, a measure of a bank’s ability to withstand financial stress, was 14.4%, above guidance of 13%, UBS said.
Having repurchased $4.3 billion in the first nine months of the year, UBS said it now expects around $5.5 billion in share buybacks in the full year.
Write to Ed Frankl at firstname.lastname@example.org