real-time news and commentary for investors
Tuesday, Oct 29
UBS swings to profit, but puts back ROE target by a year
- UBS (UBS) swung to a Q3 net profit of 577M Swiss francs ($644.2M) from a loss of 2.13B francs last year - which was hurt by impairment charges - and topped consensus of 537M francs.
- Revenue slipped 0.5% to 6.26B francs, mainly due to lower investment banking revenue.
- The results from the last quarter include provisions of 586M francs for litigation, regulatory and similar matters, but also a 222M franc tax benefit. "We continue to expect high litigation charges for the industry and for us," UBS CEO Sergio Ermotti told CNBC.
- Wealth Management division pretax profit -4.6% to 555M francs; net new money inflows 5B francs, with the bank enjoying positive inflows from all markets.
- Investment bank pretax profit rose to 251M francs from 92M francs. Revenue from equities trading +23% to 890M francs but income from forex, rates and credit fell 25% to 312M francs.
- Puts back 15% return-on-equity target by a year to 2016, due to the Swiss regulator imposing a temporary 50% add-on to the capital the bank holds against risk-weighted assets in order to deal with litigation and other matters.
- UBS expects to reach its 13% Basel III capital ratio target at the end of 2014; if the bank is successful, it plans to have a payout ratio of 50%. (PR)