UBS stated on Tuesday it could put aside $2.5bn to return to shareholders subsequent yr as a surge in third-quarter income and revenues confounded expectations that the pandemic would disrupt world lending.
The Swiss financial institution — the world’s largest wealth supervisor — reported third-quarter income attributable to shareholders of $2.1bn, up 99 per cent yr on yr. It recorded a 21.9 per cent return on tier one capital.
Income for the quarter was $8.9bn, up 25 per cent from the third quarter of 2019, pushed by a robust rise in buying and selling revenues in funding banking and powerful underlying efficiency in its core wealth administration division.
UBS stated it had realised credit score losses of simply $89m within the three months to October, largely associated to coronavirus — far lower than the $201m in losses analysts had anticipated.
The financial institution stated it supposed to pay the second instalment of its 2019 dividend in November. Below instruction from Swiss regulators, lenders within the nation have been pressured to withhold half of their dividend distribution in April till the second half of the yr, amid fears the financial results of coronavirus would pressure the worldwide monetary system.
UBS stated it supposed to ramp up its return of capital to shareholders subsequent yr to make up for restrictions imposed in 2020. It has put aside $1bn this quarter for distribution of its April 2021 dividend, and has pooled an additional $1.5bn already for buybacks subsequent yr.
The consensus-beating outcomes are the final for chief government Sergio Ermotti, who’s to step down as head of the financial institution on November 1, to get replaced by ING’s Ralph Hamers.
Analysts had forecast a internet revenue of $1.55bn.
“Our third-quarter outcomes proceed to show that our technique is differentiating us as we constantly adapt and speed up the tempo of change,” stated Mr Ermotti.
Income at UBS’ funding banking division rose 42 per cent year-on-year to $2.48bn, driving a 268 per cent rise in income earlier than tax to $632m.
The figures are one of the best third-quarter outcomes for the funding financial institution since 2012 and a vindication of one in every of Mr Ermotti’s key early choices in assuming management of UBS to take care of its then beleaguered funding banking operate.
Revenues for UBS’ core world wealth administration division have been steady at $4.28bn, in contrast with $4.14bn in the identical interval in 2019. Income earlier than tax on the division nonetheless rose 18 per cent to $1bn.