UBS(UBS) - 2025 Q3 - Earnings Call Transcript

Financial Data and Key Metrics Changes - The company reported a net profit of $2.5 billion, up 74% year-over-year, with earnings per share of $0.76 [12] - Underlying pre-tax profit was $3.6 billion, a 50% increase, driven by 5% revenue growth [12] - Return on CET1 capital was 16.3%, with a 12.7% return excluding litigation reserve releases [12][18] Business Line Data and Key Metrics Changes - Global Wealth Management (GWM) delivered a pre-tax profit of $1.8 billion, up 21% year-over-year, with significant growth in APAC [19][20] - Personal and Corporate Banking (PNC) reported a pre-tax profit of CHF 668 million, up 1%, despite a challenging Swiss macro environment [26] - Asset Management achieved a pre-tax profit of $282 million, up 19% year-over-year, with invested assets surpassing $2 trillion for the first time [29] Market Data and Key Metrics Changes - Invested assets reached nearly $7 trillion across the group, with Global Wealth Management and Asset Management contributing significantly [4] - In APAC, invested assets exceeded $1 trillion, reinforcing the company's position as the largest global wealth manager in the region [4] - GWM's invested assets increased by 4% sequentially to $4.7 trillion, with net new assets of $38 billion [22] Company Strategy and Development Direction - The company is focused on completing the integration of Credit Suisse and enhancing its platform for sustainable growth [8][11] - A national bank charter application was filed in the U.S. to broaden banking capabilities and improve client offerings [9] - The company is advancing its AI capabilities with 340 live use cases to enhance client experience and operational efficiency [9] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the company's strong performance despite macroeconomic uncertainties and regulatory challenges [10] - The outlook for the fourth quarter indicates healthy deal pipelines, although macro uncertainties and a strong Swiss franc may impact capital market activities [10] - Management remains committed to executing strategic priorities while maintaining a focus on client relationships and integration efforts [11] Other Important Information - The company achieved $900 million in incremental gross run-rate cost savings in Q3, reaching a cumulative total of $10 billion [14] - The integration of Asset Management is substantially complete, allowing for a focus on driving efficient growth [6] - The company resolved significant legacy litigation matters, enhancing capital strength and confidence in capital return plans [8] Q&A Session Summary Question: Why wait for Q4 before upgrading guidance? - Management indicated that ongoing year-end planning will inform guidance updates for 2026 [39] Question: Comments on the $500 million hit on asset management client assets? - Management clarified that UBS has no balance sheet exposure to First Brands and is taking steps to protect clients' interests [40] Question: Benefits of the national charter and net new asset outlook? - The national charter will broaden banking capabilities and enhance service offerings, with expectations of tapering advisor turnover [44][46] Question: Clarification on AT1 write-down and acquisition of Credit Suisse? - Management confirmed that the AT1 write-down was integral to the rescue transaction and that Credit Suisse had no outstanding AT1 instruments at the time of acquisition [47][73] Question: Integration of Swiss operations and system failures? - Management stated that the integration is progressing well, with most clients satisfied, and any issues are typical during such a large migration [79]