Markedly positive third quarter earnings are now being released by Swiss companies. According to IG Bank, eight of the 15 companies that have reported so far have beaten analysts’ expectations by an average 2.21% with the exception of UBS.
At Switzerland’s largest bank, UBS, profits were lower than expected at CHF 762 million against analysts’ estimates set at CHF 804 million. This result is still an improvement on last year’s CHF 577 million. Despite weaker earnings, UBS stock was up 1.95% on the announcement, as the bank’s wealth management business declared it had secured close to CHF 15 billion of net new money globally.
Commenting on the results, UBS Group Chief Executive Officer Sergio P. Ermotti said he was “very pleased with our underlying performance” but added “we are actively addressing litigation and regulatory matters”. Certainly the bank has reported that “Net charges for provisions for litigation, regulatory and similar matters of CHF 1.8 billion.”
Andreas Ruhlmann, a market analyst at IG Bank wrote in an advisory statement today that “uncertainly should remain as UBS faces probes on alleged foreign exchange manipulation and also investigation in France and Belgium for inciting tax evasion”. In an interview with Le News, he said that in both instances, the costs of settlement could be significantly in excess of the provisions made.