UBS Achieves Billion-Franc Profit, Exceeds Expectations

Swiss bank UBS reports a billion-franc profit in Q3 2024, surpassing market expectations while advancing the Credit Suisse integration efforts.

In a remarkable display of financial acumen, Swiss banking giant UBS has reported a staggering profit of 1.24 billion Swiss francs for the third quarter of 2024, decisively surpassing market expectations yet again. This impressive performance underscores the bank's ongoing commitment to the restructuring and integration of Credit Suisse, a task that has proven both complex and challenging.

The figures released on Wednesday reveal that UBS generated a profit of $1.43 billion during the months of July through September 2024. This marks a significant turnaround from the same period in 2023, when the bank faced a loss of $715 million, primarily attributed to the hefty integration costs associated with the acquisition of Credit Suisse. Notably, UBS had already demonstrated its profitability in the first two quarters of 2024, with earnings of $1.76 billion in Q1 and $1.14 billion in Q2.

In the quarter under review, UBS reported a pre-tax profit of $1.93 billion, which, when adjusted to exclude the costs related to the Credit Suisse integration, soared to an impressive $2.39 billion. These figures not only reflect robust operational performance but also significantly exceed the projections put forth by financial analysts. Operating income reached $12.3 billion, representing a 5.5% increase compared to the same quarter last year. The cost/income ratio, a critical metric for financial institutions, stood at 83.4%, with an adjusted figure of 78.5%.

In its core business segment of global wealth management, UBS successfully attracted a net inflow of new money amounting to $24.7 billion. Furthermore, the bank achieved gross cost savings of $0.8 billion during the third quarter. UBS anticipates realizing approximately $7.5 billion of its total targeted savings of around $13 billion by the end of 2024, which equates to 58% of the goal. The institution is optimistic about its trajectory, asserting that it is “well on track” to secure “further significant savings” by the close of 2025 and into 2026.

Despite this positive outlook, UBS remains judicious in its projections for the operating business. Client activity remained robust in the third quarter, buoyed by a favorable market environment, albeit one marked by phases of heightened volatility and distortions. This trend appears to have persisted into the early days of the fourth quarter, aided by a soft landing of the U.S. economy. However, the economic outlook in other regions remains decidedly bleak, compounded by geopolitical tensions and the looming uncertainty surrounding the upcoming U.S. elections.

In light of its strong capital position, UBS has reiterated its commitment to maintaining its dividend and share buyback targets for 2025 and 2026, a testament to its resilience and strategic foresight in navigating the complexities of the current financial landscape.