UBS Q3 Profit Jumps 27% as Wealth Management Drives Gains

UBS reported a 27% jump in third-quarter pretax profit to $3.59 billion, a figure that met Wall Street expectations.

The Zurich-based bank disclosed the results on Wednesday, showing a net profit of $2.7 billion for the period. This matched analyst forecasts. The bank’s common equity tier 1 capital ratio rose to 14.7% from 14.4% in the previous quarter.

Wealth management served as the primary driver of the earnings. Net new assets reached $55.1 billion by the end of the quarter. UBS also recorded $12.5 billion in client commitments across its wealth and asset management divisions. Management attributes the strength to demand for the bank’s global services.

The integration of Credit Suisse remains on schedule to conclude by year-end. UBS projects cumulative cost savings of $13.7 billion, exceeding the previous estimate of $13.5 billion. The bank describes the process as firmly on track in its earnings statement.

Tensions persist between UBS and the Swiss government regarding capital requirements. The dispute centers on proposals for stricter buffers designed to protect taxpayers from future banking crises. These measures follow the 2023 collapse of Credit Suisse and aim to limit contagion from UBS’s foreign subsidiaries.

The Swiss parliament’s upper house voted last month to mandate that UBS hold 90% of its Common Equity Tier 1 capital as backing for those foreign units. This requirement equates to roughly $16 billion in additional shares. The current ratio stands at approximately 45%, while UBS has argued for a cap of 50%.

CEO Sergio Ermotti pushed back against the proposed increase during a Wednesday appearance on CNBC’s Squawk Box Europe. He told host Carolin Roth that a 90% requirement would hinder the bank’s ability to compete over the long term. Ermotti expressed concern about the development, adding that clients expect UBS to maintain a competitive stance. He reiterated in a prior statement that the bank remains committed to its diversified global business model.