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Swiss Wealth Managing Giant UBS Reports Whopping 99% Jump in Net Profits for Q3 2020

UTC by Bhushan Akolkar · 3 min read
Swiss Wealth Managing Giant UBS Reports Whopping 99% Jump in Net Profits for Q3 2020
Photo: Depositphotos

UBS said that its well-diversified business model with a regional mix has helped the bank overcome these tough times and deliver stellar results despite the uncertain geopolitical and economic conditions.

Switzerland-based investment banking giant UBS Group AG (NYSE: UBS) reported phenomenal results for Q3 2020. The world’s largest wealth manager reported a whopping $2.1 billion jump in net profits during the last quarter. this is a whopping 99% jump quarter-over-quarter.

Ending September 30, UBS’ total operating income surged 26% on a yearly basis to $8.9 billion. The bank’s diluted earnings also surged 100% Q-o-Q at $0.56 per share. Also, the operating profits for Q3 2020 touched $2.6 billion jumping 92% from the same quarter last year. In the press release, Sergio P. Ermotti, Group Chief Executive Officer at UBS, said:

“Our third-quarter results continue to demonstrate that our strategy is differentiating us as we continuously adapt and accelerate the pace of change. I am proud of the contributions all of our employees have made day in and day out over the years, particularly in the current challenging environment.”

UBS pre-tax profit or the PBT jumped 92% to $2.6 billion during the third quarter clocking its best Q3 over the last decade. Also, the pre-tax profit for UBS’ “investment banking” surged a massive 268%. The wealth management division also reported an 18% jump in profit before tax.

The bank attributes this strong result and success to its strong client activity and a “well-diversified business model with a broad regional mix”.

Geopolitical Outlook Can Play a Crucial Role

With the coronavirus pandemic, the banking sector remains under pressure with uncertain economic conditions. However, banks with strong investment banking services have managed to report better numbers. In the past, we’ve seen a similar case with JPMorgan and now with UBS. Speaking about the geopolitical landscape and economic uncertainty, Ermotti said:

“We speak a lot about stimulus and Covid-related matters, but the geopolitical uncertainties in Europe, and also in the Sino-U.S. relationship, (are) still there and they’re there to stay so we shouldn’t underestimate that.”

But the results clearly show that UBS has successfully managed to sail through the tough times. In a word with CNBC, Ermotti added:

“The amount of visibility is very limited, but this has not really changed in the last few years and months. I think what we are doing is staying very agile and staying very focused on our plan.”

Ermotti is also bullish on his outlook for the U.S. and Asia over Europe. However, he expects Europe to implement more structural reforms and regain its market competitiveness. Such strong performance from giants can help in boosting the global banking landscape.

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