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(Bloomberg) -- UBS Group AG relied on its corporate finance business to boost profit for the investment bank in a tough quarter for trading.
The division that advises companies on mergers and helps them with share and debt sales generated 35 percent more income in the three months through September. Landmark transactions supported the performance, UBS said, while stock-related activities contributed more than twice as much as revenue as a year ago.
The investment bank reported a pretax profit of 269 million francs ($269 million), 76 million francs more than predicted in company-compiled analyst estimates. Operating expenses declined 104 million francs from a year earlier, contributing to the beat.
Corporate Client Solutions had a "very strong quarter," Chief Executive Officer Sergio Ermotti said in a Bloomberg TV interview, adding that derivatives trading within equities was also a bright spot. Most competitors apart from Morgan Stanley and Citigroup Inc. have reported lower revenue from equity underwriting.
It was the fourth consecutive quarter the division had revenues above 700 million francs. All regions performed well and “results compared favorably to the market fee pool development,” the bank said.
UBS has notched up 126 deals across M&A and corporate finance this year worth $148.6 billion, Bloomberg data show, ranking the Swiss bank 11th worldwide.
Unusually calm markets choked a core engine for profit in the third quarter. UBS reported a 2 percent drop in revenue from equities trading and a 37 percent decline in foreign exchange, rates and credit.
Deutsche Bank AG suffered a 30 percent slump in trading revenue, twice as much as the decline at its U.S. peers. Barclays Plc also saw trading revenue plunge. Credit Suisse Group AG, Switzerland’s second-biggest bank after UBS, reports next week.
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