Why Swiss Banking Giant UBS' Shares Are Rising Today

UBS Group AG UBS shares are trading higher by around 2% after the company reported Q3 FY23 results.

Sales jumped 42% Y/Y to $11.695 billion, beating the consensus of $11.037 billion. 

Underlying profit before tax, which excludes negative goodwill, integration-related expenses, and acquisition costs, came in at $0.8 billion.

The company reported an EPS loss of $(0.24) vs. consensus of $0.17.

The quarter-end CET1 capital ratio was 14.4% and the CET1 leverage ratio was 4.9%, both in excess of current guidance of ~14% and >4.0%, respectively.

The bank reported net new money of $22 billion in Global Wealth Management business thanks to asset win-back, new clients and share-of-wallet gains.

Also, Credit Suisse Wealth Management witnessed money flow into its business for the first time since Q1 FY22.

Also Read: UBS' Attractive Interest Rates - A Strategy To Recover Credit Suisse's Lost Terrain: Report

UBS had net new deposits of $33 billion across GWM and Personal and Corporate Banking (P&C), including $22 billion from Credit Suisse clients.

The bank achieved gross run-rate savings of $3 billion as of 9M FY23 vs. FY22 and expects further progress in Q4 2023.

Managed headcount for the combined group is down over 4,000 in Q3 and around 13,000 vs. pro-forma combined basis as of FY22.

Also Read: UBS Slashes 70% Of Credit Suisse's HK Research Staff Post-Integration: Report

UBS accelerated the wind-down of non-core and legacy assets and released $1 billion of CET1 capital.

The bank reduced risk-weighted assets by $6.4 billion and leverage-ratio denominator by $52.2 billion in Q3.

UBS expects wealth management and institutional clients’ transactional activity in Q4 FY23 to be impacted by ongoing geopolitical tensions and normal seasonality.

Also Read: UBS Suspends Middle East Work-Travel Amid Israel-Hamas Conflict: Report

Price Action: UBS shares are up 2.26% at $24.90 premarket on the last check Tuesday.