UBS Shares Rise 4% on Tuesday Morning after Surpassing Expectations
UBS, the Swiss multinational investment bank, experienced a surge in its shares on Tuesday morning, rising by 4%. The increase comes as UBS beat expectations for its underlying profit, recording an underlying operating profit before tax of $844 million, which far exceeded consensus expectations.
While the bank achieved tremendous success in terms of underlying profit, it also faced challenges in the third quarter. UBS reported a larger-than-expected net loss of $785 million, primarily due to $2 billion in expenses related to the integration of fallen rival Credit Suisse. Despite this setback, total group revenues experienced a notable 23% increase from the previous quarter, reaching $11.7 billion.
Looking at the bank’s liquidity, the CET1 capital ratio remained steady at 14.4%. UBS also saw positive net new money inflows in its Wealth Management division, particularly from Credit Suisse Wealth Management, the first time since Q1 2022. This contributed to a significant $22 billion in inflows for UBS Global Wealth Management.
UBS CEO Sergio Ermotti expressed satisfaction with the bank’s performance in various sectors, including Wealth Management, Asset Management, and Personal and Corporate banking in Switzerland. Analysts at Citi underscored that the exceptional results were driven by better operating expenses and revenues, both slightly ahead of expectations.
Earlier this year, UBS completed its takeover of Credit Suisse, marking a significant milestone for the bank. In August, UBS shares reached their highest point since 2008, reporting a remarkable $28.88 billion net profit attributed to negative goodwill on the Credit Suisse acquisition. UBS officially acquired Credit Suisse for a discounted amount of 3 billion Swiss francs in March.
Though UBS shares have slightly moderated since their peak in August, they remain up over 27% for the year. The bank’s ability to beat profit expectations and record substantial revenue growth demonstrates its resilience and strong market position. Investors and analysts look forward to witnessing the bank’s future performance in the dynamic world of finance.
