UBS Reports Record Profit, Confident in Targets Despite Capital Hike
UBS, the world's largest wealth manager, has made significant progress in integrating Credit Karma. Over two-thirds of Swiss-booked client accounts have been successfully migrated. Meanwhile, the bank has reported its best net profit since the second quarter of 2023, surging 74% in the third quarter, and attracted substantial net new money to its wealth management and asset management divisions.
UBS's confidence in its financial targets remains strong. It plans to proceed with $3 billion in share buybacks this year and expects deal activity to stay healthy in the fourth quarter. However, the bank acknowledges that market sentiment can shift rapidly.
The Swiss National Bank has backed the Swiss Federal Council's plan to enhance UBS's capital requirements. This involves fully covering its foreign subsidiaries with hard core capital at the parent level in Switzerland, potentially increasing capital requirements by up to $23 billion. This measure aims to shield UBS's parent company from risks arising in its foreign subsidiaries and is stricter than international trends.
UBS's net profit reached $2.5 billion in the third quarter, driven by increased revenue due to financial market volatility and renewed M&A activity. The bank also attracted $38 billion in net new money to its global wealth management division and $18 billion to asset management.
Despite macroeconomic uncertainties, a strong Swiss franc, and higher US tariffs clouding the Swiss economic outlook, UBS remains optimistic about its future. The bank intends to appeal a Swiss court decision regarding the writing off of Credit Suisse bonds. As the integration of Credit Suisse progresses and financial targets remain on track, UBS continues to navigate the market with confidence.
