By Pierre Bertrand
UBS is scheduled to report its third-quarter result on Tuesday. Here is what to know:
REVENUE: The Swiss bank is seen by analysts to report $11.32 billion in revenue for the quarter, according to a bank-provided consensus. That would compare with $8.24 billion in the prior-year period.
NET INCOME: Analysts expect UBS to post a $444 million net loss in the quarter, according to the same bank-provided consensus. The bank reported $1.73 billion in 3Q net profit a year ago.
OPERATING EXPENSES: Analysts see the bank reporting an increase in operating expenses compared with the prior year. Expenses are seen to rise to $11.7 billion, according to the company’s consensus. That result would compare with $5.92 billion in expenses in 3Q 2022. In the 2Q of this year, operating expenses were $8.49 billion.
WHAT TO WATCH:
— Business Integration, Momentum: UBS said in the second quarter of the year that it would keep hold of Credit Suisse’s Swiss business and would integrate it within UBS. The bank had said their respective boards would be restructured and harmonized as of Nov. 1, and had previously said it expects both banks will be legally merged in 2024 with Credit Suisse clients fully migrated onto UBS systems in 2025. UBS additionally said it saw a stabilization of Credit Suisse in 2Q, during which Credit Suisse saw $18 billion from wealth management and Swiss bank net deposit inflows. UBS added that it saw $16 billion in net new money at its global wealth management business, with “momentum continuing into 3Q23”. The speed at which deposits and assets are returning to UBS will be among the things Morgan Stanley said it will be closely watching, its analysts said in a research note.
— Non-Core Businesses: The bank said its noncore and legacy division–which houses Credit Suisse positions and businesses that aren’t aligned with the group’s strategy and policies–had risk-weighted assets of $55 billion as of June 30, and that it expects to let half of them mature without replacement by the end of 2026. In 2Q it said that it intends to reduce the assets of its unit in order to reduce operating costs. The bank added that it further intends to achieve gross cost reductions of more than $10 billion by 2026.
Write to Pierre Bertrand at [email protected]
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