UBS earnings for the third quarter of 2022

UBS announces its latest earnings

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UBS On Tuesday, it reported net income of $1.7 billion for the third quarter of this year, slightly above analysts’ expectations, with the Swiss bank citing a challenging environment.

Analysts expected a net profit of $1.64 billion, according to Refinitiv data. UBS reported net income of $2.3 billion a year ago.

The Swiss lender missed expectations in the last quarter When it posted a net profit of $2.108 billion. The bank said at the time that the second quarter was “one of the… The most challenging period“Due to high inflation, the war in Ukraine and strict COVID-19 policies in Asia,” he told investors in the past 10 years.

UBS said Tuesday that those factors are still on investors’ minds in the third quarter.

“The macroeconomic and geopolitical environment is becoming increasingly complex. Clients remain concerned about persistently high inflation, high energy prices, the war in Ukraine and the remaining effects of the pandemic,” UBS CEO Ralph Hammers said in a statement.

Speaking to CNBC’s Jeff Cutmore, Hammers said, however, that there were very strong inflows into the business over the quarter, with net fee-earning assets of $17 billion.

Other highlights from this quarter include:

  • Revenue was $8.3 billion, down from $9.1 billion a year ago.
  • Operating expenses fell to $5.9 billion from $6.2 billion a year earlier.
  • Tier 1 capital ratio, a measure of a bank’s solvency, was 14.4%, down from 14.9% a year earlier.

The Investment Banking division saw revenue decline 19% with lower performance in equity derivatives, cash equities and financing income offset by revenue from foreign exchange. The global wealth management division also reported a 4% year-over-year revenue decline.

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However, retail and corporate banking revenue rose during the same period on the basis of more interest rates than the Swiss National Bank.

Hammers noted Tuesday that clients on its wealth side are looking for alternative investments and cash, and expected activity on the institutional side of its business unit to remain subdued in the fourth quarter.

shi china

UBS aims to improve its business in the Asia Pacific region, and CEO Hammers said, he sees “some opportunities for growth” in China.

“emphasis [China President] Hammers said that President Xi for another term is basically an affirmation of consistency going forward, so some of the policies he has come up with over the past year are likely to continue.”

He added that the Swiss bank looks at China “by virtue of demographics and some dimensions of the economy.” “We think over time it’s a very attractive place, so it’s a strategic place,” he added.

Elsewhere, Hammers expects a “challenging” time for Europe given the ongoing energy crisis and the war in Ukraine.

“Europe will face a difficult period and a challenging winter, although it has its reserves,” he said, adding that the Swiss bank expected the region to enter a recession.

UBS shares are down about 8% so far this year.

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