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UBS Q3 Report: Growth Drops By 16%, Company To Reimburse Inappropriate Spreads

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UBS Q3 Report: Growth Drops By 16%, Company To Reimburse Inappropriate Spreads

UBS Group AG (NYSE: UBS) posted a net profit of $1.049 billion in the third quarter of 2019, according to the quarterly report the bank issued Tuesday. 

What Happened

UBS experienced a 16% year-over-year drop in net profit. 

UBS’s investment banking unit saw a 59% drop in adjusted operating profit in the latest quarter, showing a decline in its business with corporate clients as well. 

The bank’s global wealth management system also saw a 2% drop in adjusted operating profit compared to the same quarter last year.

Course-Correcting The Past

The bank said that it has identified and reported the "inappropriate spreads" it may have charged its wealth management clients in Singapore and Hong Kong between 2008 and 2015, Reuters reported Tuesday.

"UBS intends to reimburse affected customers on a basis agreed with the relevant authorities. UBS expects the relevant authorities will subject UBS to reprimands and fines as a result of their investigations,” the company said in its third-quarter statement.

What’s Next

UBS said that it had dedicated around $100 million for structural changes to be brought in the next financial quarter to counter low and negative interest rates.

"Low and persistent negative interest rates and expectations of further monetary easing will adversely affect net interest income compared with last year,” UBS said in a statement. “As we execute on our strategy, we are balancing investments for growth while managing for efficiency.”

UBS shares were trading 0.69% higher at $11.61 midday Tuesday. 

Photo by Zarxos via Wikimedia

Posted-In: banks ReutersEarnings News Eurozone Global Markets Media

 

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