UBS profits slump as trade war tensions and low interest rates bite
UBS suffered a double-digit drop in profit over the last three months, as the banking giant echoed many of its rivals by flagging concerns over the future of the global economy.
The Swiss lender reported that adjusted pre-tax profits for the third quarter slumped 16 per cent when compared with the same three-month period in the previous year.
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Profits at the firm’s investment banking division crashed 59 per cent to $203m, while global wealth management and personal & corporate banking pre-tax profits fell two per cent and 10 per cent respectively.
UBS said today that the global economy remains “challenging”, adding that it would take a $100m hit in the fourth quarter amid efforts to restructure its investment bank.
Low and persistent negative interest rates, combined with slowing economic growth and geopolitical uncertainty, has dented the firm’s outlook.
In the company’s flagship wealth management arm, UBS reported a record $15.7bn of assets under management, as rising star Iqbal Khan takes over the division.
Khan has been embroiled in a spying scandal that has overshadowed the typically staid world of Swiss banking in recent months.
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The executive left arch-rival Credit Suisse in July to join UBS, but the departure was rocked by allegations that Khan’s former bank had spied on him after he left the company.
Credit Suisse’s chief operating officer Pierre-Olivier Bouee has stepped down after an internal probe found that he alone initiated surveillance of the bank’s former head of wealth management.