San Francisco Frontiers - UBS beats expectations as claws backs provisions

The bank said it had earned a net profit of nearly $2.5 billion in the third quarter, a 74-percent increase from the same period last year.

That included $668 million in money set aside for possible litigation and adverse regulatory decisions, but which it deemed no longer necessary.

Revenue rose by three percent to nearly $12.8 billion.

The consensus forecast of analysts surveyed by Swiss financial news agency AWP was for a net profit of $1.1 billion on $11.8 billion in revenue.

"With valuations elevated across most asset classes entering the fourth quarter, investors remain engaged but increasingly focused on hedging downside risks, which is also evident in periodic headline-driven spikes in volatility," it noted.

"Against this backdrop, transactional activity and our deal pipelines remain healthy, though sentiment can shift quickly as confidence in the outlook is tested and seasonal effects come into play," it warned.

In particular it pointed to the risks of a strong Swiss franc and higher US tariffs on the Swiss economy, as well as a prolonged US government shutdown that might delay capital market activities.

UBS's investment banking operations saw revenues jump by 23 percent from same quarter last year to $3.2 billion.

Global wealth management operations posted a 5.5 percent increase in revenue to $6.5 billion.

UBS said it had also made another $900 million in cost savings as part of its integration of Credit Suisse, its failing Swiss rival that it took over in March 2023.

That takes total cost savings $10 billion, or 77 percent of the total of $13 billion target set for the end of 2026.

D.Robinson--SFF