UBS net profit jumps close to 100% in the fiscal third quarter

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Updated on Feb 29, 2024

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UBS net profit jumps close to 100% in the fiscal third quarter.
Ralph Hamers to become the CEO of UBS on November 1st.
UBS puts aside £1.16 billion for share repurchase in 2021.

UBS Group AG (SWX: UBSG) said on Tuesday that its net profit in the fiscal third quarter came in almost 100% higher on a year over year basis, attributed primarily to robust trading in recent months, resulting in more cash for share buybacks and dividend payments amidst the COVID-19 crisis.

UBS was reported trading about 2% up in premarket trading on Tuesday and jumped another 2% on market open. Shares of the company are now 8% down year to date in the stock market.

UBS values loan losses at £68.67 million in the third quarter

UBS posted £1.62 billion of net profit in Q3 versus ££810 million in the comparable quarter of last year. The Swiss banking giant valued loan losses at £68.67 million in the third quarter versus the year-ago figure of £206.80 million. In the prior quarter (Q2), UBS had registered an 11% decline in its net profit.

UBS also said on Tuesday that it had put aside £1.16 billion for share repurchase scheduled for the next year, and another £770 million in cash for dividend payments this year. The investment bank plans on paying a late dividend for 2019 next month. In September, State-backed Banco do Brasil said that its joint venture with UBS was ready to start operations.

According to UBS, it generated £1.92 billion of revenue from investment banking in Q3 as compared to a lower £1.35 billion in the same quarter last year. Revenue from the global wealth-management segment printed at £3.30 billion in the recent quarter versus £3.19 billion last year.

Ralph Hamers to become the CEO of UBS on November 1^st

In related news, Ralph Hamers is scheduled to replace Sergio Ermotti as the CEO of UBS on November 1^st. Hamers has previously served in a similar capacity at ING Groep NV. Ermotti has been the CEO of UBS for nine years.

Analyst Kian Abouhossein of JP Morgan commented on UBS third-quarter financial results and said:

“We continue to rate UBS as our top global investment banking pick. The results reconfirm our long-term view of a preference for asset gathering with a focus on Asia wealth management, geared to the ultra-rich, and limited credit risk focused on wealth and Switzerland.”

At the time of writing, UBS is valued at £33 billion and has a price to earnings ratio of 10.07.