UBS reported a 24 percent drop in net profit as its wealthier clients retreated from volatile markets and investment banking revenues shrank.
The world’s largest wealth manager posted a third-quarter net profit of $1.7bn, ahead of analysts’ estimates of $1.5bn on revenue of $8.2bn.
“Consumers continue to worry about high inflation, high energy prices, the war in Ukraine and the residual effects of the pandemic,” said chief executive Ralph Hammers.
“In Switzerland, many of our retail and small business customers will be affected by the disruptions in the rest of Europe as well, and we are focused on supporting them through the energy crisis.”
Analysts forecast UBS to be the strongest European bank in the third quarter, with its wealth management business benefiting from rising interest rates, but its performance offset by underperforming transactions and a sharp drop in investment banking revenue. .
Its cost-to-income ratio rose 3.1 percentage points to 71.8 percent, though its target range remains at 70-73 percent.
The five biggest US banks reported investment banking revenue of $32bn in the third quarter this month, down 16 per cent from a year earlier.
Fixed income, currencies and commodities revenue for U.S. banks rose 23 percent over the same period, while equity revenue fell 13 percent and advisory revenue fell 54 percent.
UBS investment banking revenues fell 19 per cent to $2bn, with income at the group’s global banking division, its advisory and capital markets business, down 58 per cent. However, global markets’ returns were down just 1 percent as a fall in equity returns was offset by a strong performance in foreign exchange and rates.