UBS’ share price rises after profiting from record US wealth management returns
Records aplenty fell at UBS this morning after announcing bumper third quarter results that beat expectations, but its share price was more conservative, climbing one per cent in morning trading.
Adjusted profit before tax was SFr1.3bn (£1.1bn), up a stonking 33 per cent compared to 2015.
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The bank's wealth management division generated SFr1bn (£826m) of pre-tax profit, which included a best-ever performance from its American operations. Personal and corporate banking returned the highest pre-tax profit since 2008
However, Sergio Ermotti, the Swiss lender's chief executive, refused to get carried away.
“We delivered a strong performance across our businesses, despite seasonality and continued macroeconomic, geopolitical and market headwinds," he said.
The Swiss banker promised to keep up the good work: "Our strong position allows us to focus on helping our clients navigate the current environment. We will continue to execute with discipline and manage risk and resources prudently."
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The American wealth management division posted profit before tax of $367m up from $80m in the same period in the previous year.
Personal and corporate's increase was less dramatic, up from SFr428m to SFr473m, "despite persistently negative interest rates" the company said. The typically reserved Swiss bank gave the equivalent of a Paul Hollywood Bake Off handshake by referring to the results as "very strong".
The investment banking was one of the few poorer performances with profit before tax of SFr342m compared with SFr614m the year before.
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UBS were not immune to the perennial banking affliction of litigation and cost-cutting. The lender has stripped out SFr1.5bn of costs over the last 12 months and is hoping to save SFr2.1bn during 2017. "UBS will continue to take steps to offset higher than expected regulatory costs."
Litigation costs totalled SFr419m of which nearly all related to its non-core and legacy portfolio.