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UBS earnings Q3 2022

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UBS reviews its newest earnings

FABRICE COFFRINI | AFP | Getty Photos

UBS on Tuesday reported a web revenue of $1.7 billion for the third quarter of this 12 months, barely above analyst expectations, with the Swiss financial institution citing a difficult atmosphere.

Analysts had anticipated a web revenue of $1.64 billion, in accordance with Refinitiv knowledge. UBS reported a web revenue of $2.3 billion a 12 months in the past.

The Swiss lender had missed expectations within the final quarter when it posted a web revenue of $2.108 billion. The financial institution stated on the time the second quarter had been “some of the difficult intervals for buyers within the final 10 years” because of excessive inflation, the warfare in Ukraine and strict Covid-19 insurance policies in Asia.

UBS stated Tuesday these elements continued to be in buyers’ minds within the third quarter.

“The macroeconomic and geopolitical atmosphere has grow to be more and more advanced. Shoppers stay involved about persistently excessive inflation, elevated vitality costs, the warfare in Ukraine and residual results of the pandemic,” Ralph Hamers, CEO of UBS, stated in an announcement.

Talking to CNBC’s Geoff Cutmore, Hamers stated, nevertheless, that there have been very robust flows into the enterprise over the quarter, with web new fee-generating belongings at $17 billion.

Different highlights for the quarter included:

  • Revenues hit $8.3 billion, down from $9.1 billion a 12 months in the past.
  • Working bills dropped to $5.9 billion, from $6.2 billion a 12 months in the past.
  • CET 1 capital ratio, a measure of financial institution solvency, reached 14.4% versus 14.9% a 12 months in the past.

Its funding banking division noticed revenues down by 19% with the decrease efficiency in fairness derivatives, money equities, and financing income being offset by revenues in overseas alternate. The International Wealth Administration division additionally reported decrease revenues, down by 4% year-on-year.

Nevertheless, Private and Company Banking revenues rose over the identical interval on extra useful charges from the Swiss Nationwide Financial institution.

Hamers famous Tuesday that shoppers on its wealth aspect have been on the lookout for different investments and money, and he predicted that exercise on the institutional aspect of its buying and selling unit would stay weak within the fourth quarter.

China’s Xi

UBS is aiming to enhance its enterprise in Asia-Pacific and CEO Hamers stated he sees “some alternatives to develop” in China.

“The affirmation of [China President] Xi for one more time period is on one aspect principally the affirmation of consistency going ahead, so among the insurance policies that he has come out with during the last 12 months will almost definitely be continued,” Hamers stated.

He added that the Swiss financial institution seems to be at China “by advantage of its demographics and among the dimensions of the financial system.” “We expect over time it’s a very engaging place, so it’s a strategic place,” he added.

Elsewhere, Hamers expects a “difficult” time for Europe given the continuing vitality disaster and warfare in Ukraine.

“Europe could have a difficult interval, a difficult winter though they’ve their reserves,” he stated, including that the Swiss financial institution expects the area to enter a recession.

Shares of UBS are down about 8% up to now this 12 months.

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