Last Updated on October 20, 2020 by admin
Departing UBS chief govt Sergio Ermotti signed off his tenure by doubling income within the third quarter, as its funding financial institution surged by 268% on the again of fairness advisory revenues and robust gross sales and buying and selling exercise.
The Swiss financial institution kicked off a European financial institution earnings season by following lots of its Wall Road rivals — beating market expectations as its funding financial institution shined. Its income of $2.1bn had been up by 99% on the earlier yr, properly forward of the $1.6bn anticipated by the 22 analysts that make up its consensus numbers.
“Our third-quarter outcomes proceed to display that our technique is differentiating us as we constantly adapt and speed up the tempo of change,” stated Ermotti in a press release. “I’m pleased with the contributions all of our staff have made day in and time out through the years, significantly within the present difficult setting.”
The third quarter was the final earlier than Ermotti is succeeded by Ralph Hamers, the previous ING Group chief govt who is predicted to push by way of a digital agenda on the Swiss financial institution.
“UBS has all of the choices open to jot down one other profitable chapter of its historical past below Ralph’s management,” Ermotti stated.
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Its funding banking unit, which this time final yr was getting ready to roll out job cuts after a hunch in efficiency and a shake-up that noticed complete enterprise traces mixed and a renewed international focus, was among the many prime performers.
Income elevated by 268% to $632m, beating the second quarter when the sector loved big positive aspects resulting from market volatility and capital markets exercise spurred by the Covid-19 disaster. Revenues within the division of $2.5bn had been round 40% forward of analyst expectations.
In proportion phrases, the 42% improve in its international markets enterprise, to $1.8bn, beat UBS’s Wall Road rivals, however the quantity was flattered by a one-off acquire on the sale of some mental property rights related to the Bloomberg Commodity Index. With out this, its gross sales and buying and selling unit, which was slimmed down in 2012, was up by 26%.
Revenues inside its conventional funding banking unit had been up 44% to $651m, primarily because of positive aspects in its fairness capital markets and leveraged finance divisions. Whereas M&A revenues dropped by 18% — a fall decrease than most US banks — fairness advisory revenues surged by 146% as a revival in preliminary public choices got here alongside a surge in different capital raisings in the course of the third quarter. UBS’s leveraged finance revenues elevated by 119%.
UBS ranked ninth globally in ECM revenues up to now in 2020, in line with rankings from knowledge supplier Dealogic, the identical place it occupied final yr.
“Reassuringly the beat is cut up throughout all divisional traces with specific energy from the funding financial institution,” stated Citigroup financial institution analyst Andrew Coombs in a be aware.
UBS has been shaking up the ranks of its advisory group in latest months, naming Nestor Paz-Galindo as international head of M&A alongside Marc-Anthony Hourihan in July. This accomplished a administration overhaul that started final September because the financial institution mixed its capital markets models and moved to a worldwide construction. Within the third quarter of final yr, the Swiss financial institution stated it was concentrating on senior bankers for cuts because it regarded to strip out $100m in prices.
UBS stated that 95% of its staff had been nonetheless working remotely due to Covid-19.
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