UBS Q3 profits fall
(28 October 2016 – Switzerland) Swiss bank UBS reiterated its negative outlook on market conditions after it reported a drop in third-quarter net profits, while increasing provisions for litigation costs related to misselling of mortgage-backed securities.
"Underlying macroeconomic uncertainty and geopolitical tensions continued to contribute to client risk aversion and generally low transaction volumes. Lower than anticipated and negative interest rates still present considerable headwinds," the bank said in a statement.
"These conditions are unlikely to change in the foreseeable future."
It added that implementing Switzerland's new bank capital standards and the proposed changes to the international regulatory framework for banks would lead to increasing capital requirements and costs.
UBS increased mortgage-related litigation provisions to US$1.41 billion (A$1.85 billion) from A$988 million at the end of June.
The wealth manager said net profit for the three months to end-September fell to 827 million Swiss francs (A$110 million) from 2.1 billion francs in the corresponding period a year earlier.
The bank’s pre-tax profit rose 11 percent to 877 million francs, thanks to a strong business in its domestic Swiss markets and cost cuts.
UBS Chief Executive Sergio Ermotti indicated last month that generally low transaction volumes were being caused political uncertainty and concerns over global growth.
"Underlying macroeconomic uncertainty and geopolitical tensions continued to contribute to client risk aversion and generally low transaction volumes. Lower than anticipated and negative interest rates still present considerable headwinds," the bank said in a statement.
"These conditions are unlikely to change in the foreseeable future."
It added that implementing Switzerland's new bank capital standards and the proposed changes to the international regulatory framework for banks would lead to increasing capital requirements and costs.
UBS increased mortgage-related litigation provisions to US$1.41 billion (A$1.85 billion) from A$988 million at the end of June.
The wealth manager said net profit for the three months to end-September fell to 827 million Swiss francs (A$110 million) from 2.1 billion francs in the corresponding period a year earlier.
The bank’s pre-tax profit rose 11 percent to 877 million francs, thanks to a strong business in its domestic Swiss markets and cost cuts.
UBS Chief Executive Sergio Ermotti indicated last month that generally low transaction volumes were being caused political uncertainty and concerns over global growth.
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