UBS Faces a Tougher Quarter – Expectations Have Shifted
After last year’s blockbuster result, analysts expect lower profits this time – yet all eyes remain on the Credit Suisse integration, writes finews.asia.
A year ago, UBS comfortably beat market expectations with a net profit of $1.4 billion. This time, analysts doubt that the bank will come close to that figure – despite a solid underlying business performance. The Swiss banking giant will present its third-quarter results this Wednesday.
According to a consensus compiled by Swiss news agency «AWP», analysts expect revenues to decline by 4.2 percent to around $12.3 billion, while pre-tax profit is forecast to drop by about 12 percent from $1.93 billion. Net profit could fall by as much as 20 percent compared to the $1.43 billion reported a year earlier.
Beyond the Headline Numbers
Beyond the key figures, investors will focus on several strategic issues shaping the future of Switzerland’s largest systemically important bank.
The debate around new capital requirements continues, but the lines between regulators and UBS are already clearly drawn – and few expect much change.
Integration in the Spotlight
Most attention will once again center on the ongoing integration of Credit Suisse. UBS is currently in the crucial phase of transferring former Credit Suisse client accounts to its own systems – a task that remains both operationally and technologically complex.
Analysts will also be watching for an update on cost-saving targets. The expenses tied to this vast restructuring effort are likely to be reflected in the results, even as management continues to emphasize efficiency gains and synergies.
Legal Clouds Begin to Clear
One potential bright spot could come from the release of provisions set aside for legacy legal cases. Notably, UBS recently concluded its long-running litigation in France, and several outstanding cases in the US have also been settled.
These developments could help offset some of the financial drag from the Credit Suisse integration – and offer investors a glimpse of stability amid one of the most ambitious banking mergers in modern history.
