UBS posts $3.59 billion quarterly profit while fighting Swiss capital rules

UBS reported a pretax profit of $3.59 billion for the third quarter, a 27% increase from the same period last year. The figure landed near consensus forecasts, while net profit came in at $2.7 billion, matching analyst estimates.

The Zurich-based bank credited its global wealth management division for the strong results. Net new assets totaled $55.1 billion by the end of the quarter. Additionally, the firm recorded $12.5 billion in client commitments across its wealth and asset management operations.

The bank's capital position improved during the period. Its common equity tier 1 capital ratio, a key metric for solvency, rose to 14.7% from 14.4% in the previous quarter. Management stated that the integration of Credit Suisse is on track to finish by year-end. The process has generated $13.7 billion in cumulative cost savings, exceeding the initial target of $13.5 billion.

Despite the financial gains, UBS remains in a dispute with the Swiss government over capital requirements. The Swiss upper house of parliament voted last month to mandate that UBS hold 90% of its common equity tier 1 capital as collateral. This would require the bank to set aside approximately $16 billion in extra shares to protect foreign subsidiaries from contagion risks. The current requirement sits at roughly 45%, and UBS argues the cap should not exceed 50%.

CEO Sergio Ermotti voiced concerns about the proposed increase during an interview on CNBC’s Squawk Box Europe on Wednesday. He told reporter Carolin Roth that clients expect the bank to remain competitive. “90% would not, long-term, allow us to be a competitive player,” Ermotti said. “I’m very concerned about this development.”

In a separate written statement, Ermotti noted that the quarter’s performance demonstrates the value of the bank's diversified global structure. He added that UBS remains strategically committed to that model and its regional footprint.