UBS Q3 Net Profit Surges, Operating Income Down - Quick Facts

(RTTNews) - Swiss financial services giant UBS AG (UBS) reported Tuesday that its third-quarter net profit attributable to shareholders was 2.07 billion Swiss francs or 0.54 franc per share, compared to last year's profit of 762 million francs or 0.20 franc per share.

The latest results included a net tax benefit of 1.30 billion francs, mainly related to a net upward revaluation of deferred tax assets, 592 million francs of net charges for provisions for litigation, regulatory and similar matters and 298 million francs of net restructuring charges.

Adjusted profit before tax was 1.0 billion francs for the quarter.

UBS' total operating income declined 8 percent to 7.17 billion francs from 7.82 billion francs a year ago. Net interest income dropped 1 percent year-over-year to 1.85 billion francs.

Looking ahead, the company noted that many of its underlying macroeconomic challenges and geopolitical issues in previous quarters remain and are unlikely to be resolved in the foreseeable future. In addition, recently proposed changes to the too big to fail regulatory framework in Switzerland will cause substantial ongoing interest costs for the firm.

In light of actual and forecasted changes in macroeconomic conditions and the announcement of a newly proposed too big to fail regulation, UBS has amended certain external performance targets and expectations for the Group and the business divisions for 2016 and future years.

The company said its adjusted cost/income ratio target remains 60-70 percent, with a short- to medium-term expectation of 65-75 percent.

UBS expects to achieve an adjusted return on tangible equity in 2016 at approximately the same level as 2015, an adjusted RoTE of approximately 15 percent in 2017 and targets an adjusted RoTE of above 15 percent from 2018 onwards.