Switzerland’s largest bank, UBS Group AG, reported a third-quarter net profit above analyst expectations Tuesday, but postponed next year’s profitability target, citing stricter capital rules at home and changes in the economic outlook.
The Zurich-based bank pushed back a target of above 15 percent on a metric that measures returns for common shareholders -- to 2018 from 2016 -- citing stricter capital requirements recently announced by Swiss authorities. However the bank said it will beat this year’s target of a 10 percent return and aim for similar margins next year.
UBS said net profit in the September quarter rose to nearly 2.1 billion Swiss francs ($2.13 billion) from 762 million francs ($770.28 million) in the same quarter last year, helped largely by a one-time tax gain. Analysts had forecast a profit of 1.76 billion francs ($1.78 billion) in a Reuters poll. UBS' European rivals -- Barclays, Credit Suisse and Deutsche Bank -- missed analyst estimates in the past quarter, according to the Financial Times.
Alongside earnings, UBS also announced a reshuffle of its top management Tuesday. The Swiss bank named Kirt Gardner chief financial officer, replacing Tom Naratil, who is taking a role in its wealth management unit, and announced four new additions to the group's board.
“The investment bank performed really well,” Alevizos Alevizakos, a London-based analyst at Keefe, Bruyette & Woods Inc told Bloomberg. “UBS is doing something right in the investment bank.”
Last year, legal provisions weighed down profits by 1.8 billion francs ($1.82 billion) as UBS, the world’s largest wealth manager, continues to face a number of legal issues. The company is being investigated for allegedly rigging currency and interest rates in the U.S., collusion in European metal markets, and its alleged role in aiding tax evasion in France, among others. The bank disclosed Tuesday that it is one of eight financial firms being investigated by authorities over alleged corruption at world soccer’s governing body, FIFA, according to the Wall Street Journal.