UBS quarterly earnings jump 74% as integration of Credit Suisse accelerates

UBS Group AG posted a sharp rise in third-quarter earnings, citing stronger investment banking results, continued inflows to its wealth arm and the release of litigation reserves tied to legacy Credit Suisse matters.

The Zurich-based lender reported net profit attributable to shareholders of $2.5 billion for the three months ended 30 September, a 74 percent increase from the $1.43 billion recorded in the same period a year earlier. The figure exceeded the $1.85 billion average estimate compiled by LSEG.

Total revenue reached $12.76 billion, edging past the $12.68 billion expected by analysts. The performance was helped by $668 million in net releases of legal provisions, mainly linked to the settlement of cases involving Credit Suisse’s residential mortgage-backed securities business and its historical cross-border activities in France.

Integration of Credit Suisse on schedule

Chief Executive Officer Sergio Ermotti said the bank’s strategic investments are “delivering results,” pointing to steady progress on the complex merger with Credit Suisse, the institution UBS rescued in a state-supported deal in 2023. The bank disclosed that it has already achieved $10 billion of the $13 billion in cost savings it targets from the combination, well ahead of the original timeline.

More than two-thirds of client accounts booked in Switzerland have been migrated to UBS platforms, and the full operational integration remains on track for completion by the end of 2026. The group emphasized that attention in the current quarter is centered on further client migrations, a process it expects will slow the pace of additional cost reductions until early next year.

Regulatory landscape may tighten

Even as UBS consolidates its position as Switzerland’s largest bank, it faces the prospect of higher capital requirements. The Swiss Federal Council is weighing measures intended to limit risks to taxpayers after the collapse of Credit Suisse. UBS has expressed support for several proposals but opposes what it describes as an “extreme” rise in capital standards.

Industry observers note that tougher rules could influence the bank’s future capital allocation and shareholder returns. The debate over systemic safeguards in Switzerland mirrors a broader international discussion on bank resilience, highlighted in recent research released by the Bank for International Settlements.

Wealth management remains a growth engine

Net new assets in the global wealth management division totaled $38 billion during the quarter, underlining the franchise’s ability to attract additional client money despite volatile markets. UBS said its deal pipelines remain “healthy,” although management cautioned that sentiment can shift quickly if macroeconomic conditions deteriorate.

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The bank’s shares have gained more than 11 percent since the start of the year, reflecting investor confidence in the integration plan and the strength of its diversified business model.

Outlook tempered by economic uncertainty

Looking to the fourth quarter, UBS warned that gross and net cost saves are likely to grow at a more modest pace as resources are focused on the Swiss platform migration and as seasonal factors lift non-personnel expenses. Management also highlighted rising market volatility and a recent uptick in hedging activity among investors.

Externally, the bank flagged several risks: a strong Swiss franc, higher U.S. tariffs on Swiss exports and lingering uncertainty over the global economic outlook. Earlier this month, the Swiss government trimmed its 2026 growth forecast, citing U.S. trade policy. In August, Washington imposed tariffs of 39 percent on Swiss goods following unsuccessful negotiations between Swiss and U.S. officials—one of the highest country-specific rates announced by the current administration.

UBS added that a prolonged U.S. government shutdown, should it occur, could delay capital market transactions and affect client activity. Nonetheless, the bank said its diversified revenue streams and early progress on integration leave it well positioned to navigate potential headwinds.

Crédito da imagem: Bloomberg