In addition to reporting a broadly stronger set of quarterly figures and updating the markets on the migration of Credit Suisse clients in different countries, UBS has also signaled its desire to buy another US wealth management business.

UBS today said its global wealth management arm posted a reported pre-tax operating profit of $1.085 billion in the three months to the end of September, rising from $926 million a year ago. 

Total revenues in the quarter, on a reported basis, were $6.199 billion, rising from $5.953 billion; operating expenses, as reported, were $5.122 billion, versus $5.017 billion, the Zurich-listed group said in a statement today.

The revenue increase was mainly caused by higher recurring net fees and transaction-based income, with some offsetting impact from lower net interest income, UBS said. 

Net credit loss expenses were $2 million, down from $10 million a year before. 

The 2 per cent year-on-year rise in operating costs was mostly due to a rise in personnel expenses, resulting from higher financial advisor compensation and higher compensable revenues.

When integration-related costs – linked to last year’s acquisition of Credit Suisse – and other effects are taken out, underlying operating costs rose 3 per cent.

UBS said its cost/income ratio in the global wealth management arm stood at 82.5 per cent. 

Invested assets stood at $4.259 trillion, a rise sequentially of $221 billion, aided by $24.7 billion of net new money. UBS said it was on track to deliver its goal of achieving about $100 billion of net new assets this year.

US acquisitions
Group chairman Colm Kelleher said the bank wishes to eventually buy another US wealth management firm to expand its presence in the country, once the Credit Suisse integration is complete, according to a report today by Bloomberg. UBS needs to make the firm which it bought in 2000, Paine Webber, work better, Kelleher said at an event in Oxford yesterday. The lender is also looking again to do what Morgan Stanley did – doubling its profitability through the purchase of Smith Barney, he said.

“UBS would very much like to be able to, when the time is right, do a similar sort of thing in the US,” Kelleher added. “We need three years to digest our own acquisition of Credit Suisse, sort out our systems issues and do everything else. We don’t want to be distracted when we’ve still got things to put right.”

Migrations
The group, which has been bedding down its integration with Credit Suisse after last year’s acquisition, said it had completed the first wave of client account migrations with transfers in Luxembourg and Hong Kong in October; Singapore and Japan are expected to take place by the end of this year, with Switzerland doing so next year. The integration will “unlock [the] next phase of significant cost saves toward the end of 2025 and in 2026.”

“Against a market backdrop that, while constructive, still exhibited periods of high volatility and dislocation, our businesses delivered impressive revenue growth as we maintained strong client momentum, particularly in the Americas and APAC. We continue to significantly mitigate execution risk as we progress on the integration of Credit Suisse while remaining disciplined in driving our cost and efficiency targets,” Sergio Ermotti, group CEO, said. “At the same time, we are investing in our people, products and capabilities, including technology, to enhance client experience, improve productivity and achieve sustainably profitable growth.” 

Group results
Across the whole group, total pre-tax profit, on a reported basis, was $1.929 billion in Q3 2024, against a loss of $184 million a year earlier. Net profit attributable to shareholders was $1.425 billion; return on Common Equity Tier 1 capital was 7.6 per cent, or 9.4 per cent on an underlying basis.

The bank had a Common Equity Tier 1 ratio – a standard international measure of shock absorber capital – of 14.3 per cent at the end of September.