UBS q3 2023 earnings

UBS shares climbed on Tuesday morning after the Swiss banking large resoundingly beat expectations for underlying revenue.

The financial institution recorded an underlying working revenue earlier than tax of $844 million, effectively forward of consensus expectations. UBS shares had been up 3.2% by mid-afternoon in Europe.

Factoring in $2 billion in bills associated to the mixing of fallen rival Credit score Suisse, UBS posted a bigger-than-expected third-quarter internet loss attributable to shareholders of $785 million. Analysts polled by Reuters had anticipated a quarterly internet lack of $444 million in a company-compiled ballot.

Listed below are another highlights:

• Complete group revenues had been $11.7 billion, up 23% from $9.54 billion within the second quarter.
• CET1 capital ratio, a measure of financial institution liquidity, was 14.4%, unchanged from the earlier quarter.
• Credit score Suisse Wealth Administration generated constructive internet new cash inflows for the primary time for the reason that first quarter of 2022, contributing to inflows of $22 billion for UBS International Wealth Administration.

“You would see that, sequentially, we improved the underlying efficiency throughout Wealth Administration, Asset Administration and our Private and Company banking in Switzerland. They each grew on a quarter-on-quarter foundation,” UBS CEO Sergio Ermotti advised CNBC on Tuesday.

“The IB [investment bank] has been dealing with tougher market situations, notably while you take a look at our enterprise mannequin and the truth that we’ve been onboarding sources from Credit score Suisse. Nevertheless it was a really stable quarter, and we made superb progress in our integration plans, and on the similar time we noticed very sturdy inflows from purchasers.”

A ‘good set of outcomes’

Analysts at Citi highlighted on Tuesday that the $844 million underlying revenue earlier than tax determine was “notably forward of prior firm steering (of break-even), treble consensus expectations and 6% forward of our above-consensus forecast.”

“As we anticipated the beat is pushed by higher opex [operating expense], 7% under consensus, with revenues additionally 1% forward. That is then barely offset by heavier provisions,” they famous, including that the acceleration of Wealth Administration internet new cash inflows in September was additionally “encouraging.”

UBS can also be within the technique of totally integrating Credit score Suisse’s Swiss banking unit — a key revenue middle — and is anticipated to chop a hefty proportion of the legacy financial institution’s workforce.

UBS reported internet new deposits of $33 billion throughout its International Wealth Administration and Private and Company Banking (P&C) divisions, with $22 billion coming from Credit score Suisse purchasers and constructive deposit inflows for P&C in September, the month after UBS introduced the choice to combine the home financial institution.

The financial institution additionally introduced earlier this 12 months that it’s focusing on gross price financial savings of a minimum of $10 billion by 2026, when it hopes to have accomplished the mixing all of Credit score Suisse Group’s companies.