ZURICH, Oct 22 — Top Swiss bank UBS posted a 16 per cent fall in third quarter net profits today on lower investment banking earnings, citing a “challenging environment” of trade disputes and low rates.
“We delivered solid results generating attractive returns, considering the market conditions,” said chief executive officer Sergio Ermotti in unveiling Q3 profits of US$1.049 billion.
“We are balancing investments for growth while managing for efficiency,” Ermotti added in a statement, after the bank posted a 4.6 per cent fall in operating income to US$7.09 billion, a fourth straight drop.
Though profits came in ahead of analysts’ average forecast of US$953 million, revenue was slightly lower than expectations of US$7.1 billion.
Investment bank adjusted pre-tax profit slumped 59 per cent to US$203 million, not helped by falling advice fee volumes from mergers and acquisitions.
Global wealth management, by far UBS’ biggest unit in terms of revenue and profit, brought adjusted pre-tax profit of US$919 million, down two per cent year on year, before taking restructuring costs into account.
UBS revealed it expects to take a US$100 million charge in the fourth quarter to restructure its investment bank, adding that persistently low interest rates are hitting income from lending.
“We continue to take actions to grow profitability and further capitalise on the strengths of our diversified franchise, delivering long-term value for our clients and shareholders,” commented Ermotti, while adding that the global economic climate was bound to have an impact.
“Geopolitical tensions and trade disputes continue to impact investor confidence.”
“Low and persistent negative interest rates and expectations of further monetary easing will adversely affect net interest income compared with last year,” he concluded. — AFP
