In This Article:
* UBS posts 9% Q3 net profit rise, best quarter since 2015
* CEO Ralph Hamers plans to unveil 2025 vision in Feb
* Bank aims to offer new service for wealthy in the U.S. (Adds market reaction, analyst comment in paragraphs 11-12)
By Brenna Hughes Neghaiwi
ZURICH, Oct 26 (Reuters) - UBS posted its highest quarterly profit since 2015 on Tuesday, as robust trading activity by the world's ultra wealthy led to a 23% surge in fee income.
The surprisingly strong results follow double-digit percent gains for net profit in each of the past four quarters and come as Switzerland's largest bank announced new plans for its digital push including a new advisory service for affluent U.S. clients.
Third-quarter net profit came in at $2.279 billion, easily surpassing a median estimate of a 24% slump to $1.596 billion from a poll of 23 analysts compiled by the bank.
"We continue to perform well above the financial targets that we have given you. And while we do that, we continue to be focused on driving growth on the top and the bottom line," Chief Executive Ralph Hamers said on a call with analysts.
The bank's flagship wealth management business posted its best pre-tax profit ever, soaring 43% on a 4% climb in income from transactions amongst its wealthy and ultra-wealthy clients as well as a 15% rise in net interest income due to higher lending levels and margins.
The division saw $18.8 billion in fresh client fee-generating inflows, while invested assets fell slightly from June to $3.198 trillion.
UBS's investment bank posted a steadier performance, with revenue edging 1% higher. Revenue in its equities trading unit was up 3% to $1.36 billion, but its foreign exchange, rates and credit arm posted a 32% drop in turnover to $363 million.
Revenue from advising on deals and listings jumped 22% to $792 million, helped by bumper M&A volumes.
The surprise profit comes on the heels of a stellar quarter for U.S. and British banks which, encouraged by economic rebounds, released cash set aside for pandemic losses. A record wave of dealmaking activity also bolstered results for the likes of Goldman Sachs and JPMorgan.
UBS shares were 1.4% higher in morning trade.
"The result marks another impressive quarter," Citi analysts said in a note to clients, adding that UBS remained one of their top picks in the banking sector and reiterating a buy rating on the stock.
It nonetheless sounded a slightly cautious note for the coming quarter, saying continued uncertainty surrounding economic recovery and recent policy changes in China could hurt business. It also noted client activity levels had been unusually high in the past quarter.