UBS income slide as wealthy shoppers flip cautious on turbulent markets

UBS reported a 24 per cent fall in web revenue, as its wealthy shoppers held again from turbulent markets and funding banking revenues shrank.

The world’s greatest wealth supervisor generated $1.7bn of web revenue within the third quarter, forward of analyst estimates of $1.5bn, on $8.2bn of income.

“Shoppers stay involved about persistently excessive inflation, elevated power costs, the battle in Ukraine and residual results of the pandemic,” mentioned chief government Ralph Hamers.

“In Switzerland, lots of our retail and small enterprise shoppers can even be impacted by disruptions throughout the remainder of Europe, and we’re centered on supporting them by way of the power disaster.”

Analysts had predicted UBS can be the strongest European financial institution within the third quarter due to its wealth administration enterprise benefiting from rising rates of interest, however that its efficiency can be offset by its risk-averse shoppers making fewer transactions and a pointy fall in funding banking revenues.

Its cost-income ratio rose 3.1 share factors to 71.8 per cent, although nonetheless inside its goal vary of 70-73 per cent.

The 5 greatest US banks reported $32bn of funding banking revenues for the third quarter this month, down 16 per cent in contrast with a 12 months earlier.

Fastened earnings, currencies and commodities revenues (FICC) for the US banks rose 23 per cent over the identical interval, whereas equities revenues have been down 13 per cent and advisory revenues have been down 54 per cent.

Primarily based on these figures, analysts at Citi predicted European funding banking revenues can be down 33 per cent, FICC up 3 per cent, equities down 26 per cent and advisory down 72 per cent.

UBS funding banking revenues dropped 19 per cent to $2bn, with revenues on the group’s world banking division, which incorporates its advisory and capital markets enterprise, lowering 58 per cent. Nonetheless, world markets revenues have been down simply 1 per cent as a fall in equities earnings was offset by a powerful efficiency in overseas change and charges.