UBS set to make bumper 2005 net profit

UBS is full of confidence after its record quarterly performance Keystone

Switzerland's largest bank, UBS, has announced a record profit in the third quarter and is well on the way to its best-ever annual figures.

Third-quarter net profit rose by 71 per cent to SFr2.77 billion ($2.15 billion) on higher fees and wealth management, clearly beating market expectations.

“We will remain very optimistic about closing what will be an extremely good year for us,” commented UBS chief financial officer Clive Standish in a conference call.

Net new money flowing into the bank’s wealth management business, which is the largest of its kind worldwide, totalled a record SFr31.1 billion, up from SFr20.2 billion in the second quarter.

The figure boosted assets under management at UBS to SFr2.7 trillion at the end of September.

This is six per cent higher than at the end of the second quarter and 20 per cent up on the comparable date last year.

Market opportunities

“It is unusual for the third quarter to be so strong. But the market offered plenty of opportunities,” Standish said in a statement.

Analysts polled by Reuters and Bloomberg had expected a third-quarter net profit of about SFr2.36 billion.

“The key thing to note is the strength of the wealth management operations and the net new money inflows,” said analyst Simon Maughan at Dresdner Kleinwort Wasserstein.

“The world is opening up now to UBS. There’s money coming in from the Middle East, from Asia and China,” he added.

Total operating income from financial businesses was SFr10.8 billion in the third quarter, up 27 per cent from the third quarter in 2005.

Net trading income rose 159 per cent in the quarter from the same period last year to SFr2.3 billion.

“We expected a good result after the US brokers and the German brokers had a good result,” commented analyst Thomas Schudel at Bank Leu. “This exceeds my expectations significantly.”

UBS net profit in the first nine months stands at SFr7.54 billion, which is well above the SFr5.94 billion reported for the comparable period in 2004 when the bank made a record full-year net profit.

Rival Credit Suisse, Switzerland’s number two banking concern, is due to announce its third-quarter figures on Wednesday.

swissinfo with agencies

Key facts

UBS third-quarter figures:
Operating income – SFr13.495 billion (+25% on 3Q04)
Net profit – SFr2.77 billion (+71%)
The figures represent UBS’s best-ever quarterly performance.
UBS was created in 1998 by the merger of the Union Bank of Switzerland and the Swiss Bank Corporation.