UBS Profit Doubles on Trading Surge -- Update
By Margot Patrick
UBS Group AG said it set aside $1.5 billion to repurchase shares
next year as third-quarter net profit doubled and its loan losses
from the coronavirus pandemic remained relatively low.
Net profit rose to nearly $2.1 billion from $1.05 billion a year
earlier, thanks mainly to a surge in stock and bond trading and
deal making by clients at its investment bank and higher revenue at
its wealth management business. Loan losses in the period were $89
million, lower than the $268 million and $272 million provisions
taken in the first and second quarters.
UBS and other banks with wealth management arms have been
benefiting this year from more client investing and a boost in
total global wealth as asset prices have rebounded from the spring.
Its investment bank, like others, has also made money from
ramped-up client trading and deal making.
Investment bank revenue jumped to $2.49 billion from $1.75
billion a year earlier, while global wealth management revenue rose
to $4.28 billion from $4.14 billion.
The results are the last by UBS under Chief Executive Sergio
Ermotti, who leaves the job this month after nine years to become
chairman at Swiss Re. Under his tenure, UBS downsized its
investment bank and refocused around wealth management, in what has
been regarded as a largely successful reinvention of the bank.
Ralph Hamers, formerly the CEO of ING Groep NV, started at UBS
in September and begins as CEO Nov. 1. Mr. Ermotti on Tuesday said
UBS has "all the options open" for more success under Mr.
The Swiss banking giant said it would pay a delayed dividend
installment from 2019, as planned, after a shareholder meeting next
month. It and other Swiss banks were asked by regulators to delay
2019 payouts earlier this year. Other European banks are still
waiting for the go ahead from regulators to start paying dividends
UBS said the pandemic has been changing the way clients interact
with the bank, bringing more of them online through mobile banking
applications and other platforms. Its wealthy customers have also
been on an "intensified search for returns," UBS said in a
presentation, including by increasing their investments in private
markets, an area that includes buying stock and lending money to
companies that aren't publicly traded.
Write to Margot Patrick at email@example.com
(END) Dow Jones Newswires
October 20, 2020 02:28 ET (06:28 GMT)
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