UBS Group returned to profit in the third quarter, surpassing expectations thanks to improved operational efficiencies and its ongoing integration with Credit Suisse. The Swiss banking giant reported an attributable net profit of $1.43 billion for the quarter ending September 30, rebounding from a $715 million loss the previous year.
Revenue climbed to $12.33 billion from $11.70 billion, outperforming Visible Alpha's consensus estimates of $993.6 million in net income and $11.08 billion in revenue. The profit surge primarily stemmed from a 12% drop in operating expenses, attributed to lower general, administrative, and personnel costs.
Furthermore, net credit loss expenses decreased to $121 million from $239 million year over year. The bank also celebrated a substantial revenue boost driven by increased net fee and commission income, net interest income, and gains from financial instruments valued at fair value through profit or loss. Following the successful completion of its merger with Credit Suisse in July, UBS migrated Global Wealth Management client accounts in Luxembourg and Hong Kong to its platforms.
Migrations in Singapore and Japan are expected to be completed by year-end. The bank achieved $800 million in gross cost savings during the third quarter, totaling around $6.8 billion in annualized savings, with a goal of reaching $7.5 billion by the end of 2024. Looking forward, UBS anticipates a mid-single-digit decrease in net interest income from its global wealth management division.
The personal and corporate banking sector is likely to experience a low-single-digit decline. The bank also expects to incur a quarterly pretax loss from its non-core and legacy operations. Analysts at RBC Capital Markets recognized the bank's strong results for the quarter but expressed concerns regarding potential macroeconomic uncertainties ahead.
The CET 1 ratio was reported lower than expected primarily due to a timing effect, partially offset by a reduced impact from B4 in 2025. UBS has accelerated its cost savings and net credit loss run-down plan. Uncertainty remains regarding the implications of the Too Big To Fail report, but strong earnings momentum and execution of merger synergies offer support. In midmorning trade, the stock was down almost 2%..