UBS reported a third-quarter profit of more than 2 billion francs, beating analysts' expectations by a good margin even in a challenging economic environment. Switzerland's biggest bank announced measures to counter the difficulties.
UBS posted a profit of 2.1 billion francs in the three months through September, the bank said in a statement on Tuesday. Analysts on average expected net of 1.7 billion.
Profit rose 70 percent from the second quarter and compares with a profit of 762 million a year earlier, according to the documents provided. The result of Zurich-based UBS was boosted by a tax credit of 1.3 billion against earlier losses.
Macroeconomic Challenges Remain
UBS remains the best capitalized global banking giant, it said in the statement. The capital ratio CET1 was 14.3 percent at the end of September, above the 13 percent target rate for banks deemed important for the Swiss financial system.
In its outlook for the rest of the year, UBS highlights underlying macroeconomic challenges and geopolitical issues that are unlikely to be resolved in the foreseeable future. The bank also expects the proposed changes to the «too big to fail»-regulations in Switzerland to lead to substantial interest costs.
Measures to Be Enacted
Interest rates, which weren't increased despite expectations, a negative performance of certain asset classes and the weak performance of the euro compared to the franc also affected the performance of the bank.
«We are executing the measures already announced to mitigate these effects as we progress towards our targeted return on tangible equity in the short to medium term,» the bank said.
In the fourth quarter of 2015, UBS expects to activate net additional deferred tax assets (DTA) of 500 million francs, following the third quarter net upward movement of 1.5 billion mainly related to the U.S., reflecting updated profit forecasts and an extension of the relevant taxable profit forecast period used in valuing its DTA.
