UBS Q3 Profit Jumps 27% to $3.59 Billion as Wealth Assets Soar

UBS reported a third-quarter pretax profit of $3.59 billion on Wednesday. The figure represents a 27% increase compared to the same period last year. Net profit for the quarter totaled $2.7 billion. These results aligned with analyst expectations. The Swiss banking group released the figures on Wednesday morning.

The bank’s performance was driven by its global wealth management division. Net new assets reached $55.1 billion by the end of the quarter. UBS also secured $12.5 billion in client commitments across its wealth and asset management businesses. The company’s common equity tier 1 capital ratio stood at 14.7%. This is up from 14.4% in the previous quarter.

The integration of Credit Suisse remains a central focus for the bank. UBS stated that the process is firmly on track to conclude by the end of the year. The bank now expects cumulative cost savings of $13.7 billion from the merger. This exceeds the previous estimate of $13.5 billion.

Tensions persist between UBS and the Swiss government regarding capital buffer rules. The measures aim to protect taxpayers from future banking crises and contagion from foreign subsidiaries. UBS is considered systemically important to the Swiss economy. Last month, the Swiss upper house voted to require UBS to hold 90% of its Common Equity Tier 1 capital against its foreign subsidiaries. This requirement equates to roughly $16 billion in additional shares. The current backing level is approximately 45%. UBS has argued that the figure should not exceed 50%.

UBS Chief Executive Sergio Ermotti addressed the capital debate on CNBC’s Squawk Box Europe. He stated that clients expect the bank to remain competitive. Ermotti told host Carolin Roth that a 90% requirement would not allow the bank to be a competitive player in the long term. He added that he is very concerned about this development.

In an earlier statement, Ermotti credited the strong quarter to the bank’s diversified global business model. He noted that UBS remains strategically committed to this model and its global and regional footprint. The bank will continue to operate under its current capital structure while negotiations with regulators continue.

UBS expects to complete the Credit Suisse integration by December 31. The bank will report its fourth-quarter results in late January. Shareholders will review the capital buffer proposals during the upcoming legislative session.