UBS Group AG Q3 2024 Financial Performance

UBS Group AG (NYSE:UBS) has reported a robust financial performance in its third quarter of 2024, with a net profit of $1.4 billion and an underlying profit before tax (PBT) of $2.4 billion. The company's year-to-date PBT reached $7.1 billion, with a return on CET1 capital of 9.2%. Underlying revenues increased by 9% year-on-year, with a notable 15% rise in invested assets, now totaling $6.2 trillion. The firm's CET1 capital ratio stood at 14.3%, following an accelerated phase-out of transitional capital adjustments. UBS remains focused on its long-term growth objectives, despite global macroeconomic challenges.

Key Takeaways

• Net profit: $1.4 billion; Underlying PBT: $2.4 billion for Q3 2024.
• Year-to-date PBT: $7.1 billion, with a 9.2% return on CET1 capital.
• Invested assets increased by 15% to $6.2 trillion.
• CET1 capital ratio: 14.3%.
• Successful client account migrations in Luxembourg and Hong Kong, with plans for Singapore, Japan, and Switzerland.
• Investment in technology, including Microsoft Copilot and AI assistant Red.
• Employee satisfaction: 84% proud to work at UBS.
• Projected $7.5 billion in annualized gross cost savings by year-end 2023.

Company Outlook

• UBS aims to exceed pre-acquisition capital returns by 2026, pending regulatory assessments.
• Confident in achieving long-term growth objectives despite global macroeconomic factors.
• Emphasis on ongoing integration efforts with a focus on client satisfaction and operational efficiency.
• Further insights into 2025 expectations will be provided in the next quarterly results.

Bearish Highlights

• Smaller cost savings this quarter due to higher variable compensation and foreign exchange headwinds.
• CET1 capital ratio expected to decline to 13.3% in the upcoming report.

Bullish Highlights

• Strong financial performance with significant increases in profits and invested assets.
• Successful completion of client account migrations enhances customer experience.
• Positive outlook with robust capital position and ongoing share buybacks.

Misses

• Pretax profit in Personal & Corporate Banking down 7% due to lower Swiss franc interest rates.
• Projected impacts on net interest income for 2025 reduced due to lower U.S. dollar rate assumptions.

Q&A Highlights

• Executives discussed the impact of lower Swiss franc interest rates on lending opportunities.
• Consideration of acquisitions versus hiring new advisers in the U.S. wealth management sector discussed.
• Robust performance attributed to a strong team and favorable market conditions in the Investment Bank.
• Updates on 2025 and 2026 plans will be provided in the February earnings update.

UBS Group AG continues to demonstrate financial resilience and strategic progress, particularly in the integration of Credit Suisse. The firm's solid capital position and commitment to growth, despite challenging global conditions, indicate a positive trajectory for the future.

InvestingPro Insights

UBS Group AG's strong financial performance in Q3 2024 is supported by data from InvestingPro, with a market capitalization of $100.45 billion. The company's reported revenue growth of 38.37% over the last twelve months aligns with its reported 9% increase in underlying revenues. Operating income margins stand at 19.95%, demonstrating efficient operations.

InvestingPro tips highlight UBS's consistent dividend payments for 13 consecutive years, with a current dividend yield of 1.76%. UBS's P/E ratio is 42.49, dropping to 14.06 when adjusted for the last twelve months' earnings.

For more detailed analysis, InvestingPro offers additional insights into UBS's performance and market position.