UBS Profit Falls Short in Uneven Quarter for Chief Ermotti
(Bloomberg) — UBS Group AG reported net income that fell just short of analysts’ estimates in a quarter that Chief Executive Officer Sergio Ermotti described as “bumpy,” and disappointed investors who were seeking clarity on the scale of the bank’s next buyback plan.
Profit in the three months through September rose 8.4% from a year earlier, the weakest growth since the start of last year. That’s even as client inflows in the wealth unit came in ahead of expectations at $55.1 billion, led by Asia Pacific and the Americas.
UBS sounded a note of caution for the rest of the year, signaling a “typical seasonal moderation in transaction volumes” ahead. With a strategy update scheduled for February, the bank declined to say whether it would expand on the current, $3 billion share repurchase program.
Switzerland’s largest bank, which has been facing calls for stricter regulation since it took over Credit Suisse three years ago, signaled the pace and amount of future buybacks remains subject to the development of that debate. Ermotti suffered a setback last month when the upper house of parliament broadly supported a proposal for a potential $16 billion increase in its capital requirements and rejected a compromise that had been backed by the bank.
“UBS delivered a somewhat underwhelming set of results with adjusted pre-tax profits roughly in line with consensus, limiting any potential upgrades,” analysts at KBW including Thomas Hallett wrote in a note.
UBS fell 1.3% at 11:52 a.m. in Zurich trading, paring gains this year to 3.7%.
The quarter was an uneven one also for UBS’s investment bank. Advisory revenue slid 44%, with the comparison warped by a record dealmaking boom in 2025. Equities helped dampen the blow, with revenue up 22%, though that pales in comparison with BNP Paribas SA’s 50% equities trading surge reported on Wednesday. Financing for hedge funds also helped drive the UBS result.
“It was a kind of bumpy quarter, a very strong start, and a slowdown in the second part,” Ermotti said in an interview with Bloomberg Television’s Stephen Carroll. The capital debate remains “a distraction,” he said.
UBS reported a gain of 6% in underlying operating expenses at the wealth division, partly driven by higher compensation to financial advisers in the US. The bank has long sought to expand its US footprint, recently securing a full national bank charter and investing heavily in the region through aggressive recruiting and compensation adjustments.
At RBC Capital Markets, analyst Anke Reingen said the net new asset trends in wealth management were “encouraging.”
–With assistance from Isabel Demetz, Macarena Muñoz, Nick Heubeck and Allegra Catelli.
(Updates shares in sixth paragraph.)
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