The numbers: Not bad, all things considered. Swiss banking giant UBS reported a third-quarter profit of 762 million Swiss francs ($802 million), up 32% from the same period last year. Although this was a bit lighter than the markets were expecting, investors were cheered by encouraging signs in the group’s wealth-management unit. aUBS’s shares rose by more than 4% in early Zurich trading.
The takeaway: The bank’s shift towards wealth management, and away from investment banking, is bearing fruit. The group’s wealth management division recorded its largest pre-tax profit since early 2009, thanks to big asset inflows from clients in Asia. Meanwhile, UBS’s beleaguered investment bank saddled the group with a pre-tax loss of 1.2 billion Swiss francs, thanks to a hefty legal charge.
What’s interesting: Lingering litigation issues continue to haunt UBS. The bank took provisions worth 1.8 billion Swiss francs against future legal costs in the third quarter, with ongoing cases that include allegations of manipulating the foreign exchange market, helping French clients evade taxes, and sundry other entanglements. Per usual, the “Litigation, regulatory and similar matters” section of the bank’s earnings report makes for interesting reading—this quarter’s edition runs to 10 pages. It’s not likely to shrink any time soon, with the bank warning that “charges associated with litigation, regulatory and similar matters will remain elevated for the foreseeable future.”