UBS Group AG has reported strong financial results for the third quarter of 2024, with a net profit of $1.4 billion and an underlying profit before tax (PBT) of $2.4 billion.
The bank's revenue increased by 9% year-on-year to $11.7 billion, driven by growth in its Global Wealth Management and Investment Bank divisions.
Operating expenses declined by 4% to $9.2 billion, leading to an improved return on common equity tier 1 (CET1) capital of 9.4%.
The CET1 capital ratio stood at 14.3% at the end of the quarter, reflecting the bank's strong capital position.
The increase in invested assets, which rose by 15% year-on-year to $6.2 trillion, indicates growing trust and engagement from clients.
UBS successfully integrated client accounts and data in Luxembourg and Hong Kong onto its platforms, marking a significant milestone in its integration efforts.
The Investment Bank division reported a 29% increase in revenues to $2.5 billion, with strong performance in equities and advisory services.
Despite the positive results, UBS faces challenges that could impact its future performance.
The bank expects headwinds on net interest income in Switzerland, which could affect overall revenue growth.
UBS anticipates a mid-single-digit percentage drop in net interest income in the fourth quarter due to expected rate cuts.
The noncore and legacy division reported a pretax loss of $333 million, highlighting the difficulties associated with winding down legacy positions.
UBS also faces uncertainties from global macroeconomic developments, geopolitical conflicts, and the upcoming U.S. elections, which could influence investor behavior and market dynamics.
During the earnings call, UBS's CEO, Sergio Ermotti, confirmed the bank's commitment to share buybacks for 2025.
UBS plans to announce the size of the buyback alongside the Q4 results, reflecting its confidence in its capital position.
Ermotti reassured investors that the bank does not expect immediate changes to its 2025 capital return ambitions.
UBS's focus on share buybacks aligns with its strategy to enhance shareholder value while navigating regulatory changes.
The bank remains vigilant in assessing the potential implications of regulatory developments on its capital management strategies.
UBS's Global Wealth Management division reported a pretax profit of $1.3 billion, a 30% increase compared to the previous year.
The Asset Management division also demonstrated strong performance, with a 46% increase in pretax profit to $237 million.
UBS's growth in wealth and asset management is supported by its focus on technology and digital transformation.
The bank aims to provide a seamless experience for clients by enhancing its platforms and integrating client data.
UBS's commitment to innovation and client engagement will be crucial in sustaining its growth momentum.