- UBS posts 9% Q3 internet revenue rise, greatest quarter since 2015
- CEO Ralph Hamers plans to unveil 2025 imaginative and prescient in Feb
- Financial institution goals to supply new service for rich within the U.S.
ZURICH, Oct 26 (Reuters) – UBS (UBSG.S) posted its highest quarterly revenue since 2015 on Tuesday, as sturdy buying and selling exercise by the world’s extremely rich led to a 23% surge in payment revenue.
The surprisingly sturdy outcomes observe double-digit p.c positive factors for internet revenue in every of the previous 4 quarters and are available as Switzerland’s largest financial institution introduced new plans for its digital push together with a brand new advisory service for prosperous U.S. shoppers.
Third-quarter internet revenue got here in at $2.279 billion, simply surpassing a median estimate of a 24% hunch to $1.596 billion from a ballot of 23 analysts compiled by the financial institution.
“We proceed to carry out properly above the monetary targets that now we have given you. And whereas we do this, we proceed to be centered on driving development on the highest and the underside line,” Chief Govt Ralph Hamers mentioned on a name with analysts.
The financial institution’s flagship wealth administration enterprise posted its greatest pre-tax revenue ever, hovering 43% on a 4% climb in revenue from transactions amongst its rich and ultra-wealthy shoppers in addition to a 15% rise in internet curiosity revenue on account of increased lending ranges and margins.
The division noticed $18.8 billion in contemporary shopper fee-generating inflows, whereas invested belongings fell barely from June to $3.198 trillion.
UBS’s funding financial institution posted a steadier efficiency, with income edging 1% increased. Income in its equities buying and selling unit was up 3% to $1.36 billion, however its international alternate, charges and credit score arm posted a 32% drop in turnover to $363 million.
Income from advising on offers and listings jumped 22% to $792 million, helped by bumper M&A volumes.
The shock revenue comes on the heels of a stellar quarter for U.S. and British banks which, inspired by financial rebounds, launched money put aside for pandemic losses. A report wave of dealmaking exercise additionally bolstered outcomes for the likes of Goldman Sachs (GS.N) and JPMorgan (JPM.N).
UBS shares have been 1.4% increased in morning commerce.
“The end result marks one other spectacular quarter,” Citi analysts mentioned in a notice to shoppers, including that UBS remained certainly one of their high picks within the banking sector and reiterating a purchase ranking on the inventory.
It nonetheless sounded a barely cautious notice for the approaching quarter, saying continued uncertainty surrounding financial restoration and up to date coverage modifications in China may harm enterprise. It additionally famous shopper exercise ranges had been unusually excessive previously quarter.
CEO Hamers, who took the reins in November 2020 following a profitable tenure at ING (INGA.AS) that made the Dutch lender extra digitally savvy, mentioned he deliberate to current an up to date technique on Feb. 1.
That may embrace new pushes into digital and hybrid banking.
UBS is attempting to enhance its digital companies to achieve extra prospects outdoors its tremendous wealthy core shopper base, whereas additionally saving on prices. It sees potential for a brand new on-line platform to tug in $30 billion within the subsequent yr after being launched in Could 2020, Reuters reported in June. learn extra
As a part of its 2025 imaginative and prescient, it now desires to construct a digitally scalable recommendation mannequin for prosperous shoppers within the Americas, which incorporates the core wealth market of america.
It additionally desires to broaden its digital choices in its dwelling market, aiming to deliver its price/revenue ratio all the way down to 55% in its Swiss enterprise from 59% within the first 9 months.
UBS derives the most important chunk of its earnings from advising and managing cash for the world’s wealthy, whereas additionally sustaining smaller world funding banking and asset administration operations. It conducts retail and company banking solely in its dwelling market.
That mannequin has helped Switzerland’s largest lender exceed expectations because the outbreak of the coronavirus pandemic, as buoyant markets helped it generate increased earnings off of managing cash for the wealthy.
Reporting by Brenna Hughes Neghaiwi and Oliver Hirt; Modifying by Michael Shields and Edwina Gibbs
Our Requirements: The Thomson Reuters Belief Ideas.