Swiss bank UBS lowers profit guidance and pushes back targets
Swiss bank UBS has warned that tougher regulation in Europe as well as a slowing global economy is going to weigh on profits over coming years.
Despite stronger third quarter results than many of its European and US rivals, the bank's share price dropped by five per cent on the news.
Net profit at the bank for the three months ended September rose to SFr2.1bn (£1.5bn) from SFr762m a year earlier
Analyst expectations for the quarter had been SFr1.76bn.
Much of the profits stemmed from a tax break of SFr1.3bn, as a result of a valuation increase in deferred tax assets.
European banks have recently been battling with capital controls, stricter regulation and stubbornly low interest rates.
The bank pushed back expectations on a number of its key ratios as a result.
Speaking on an investor call UBS chief executive Sergio Ermotti : “In the real world things do change. What must remain constant is our discipline and determination to deliver what we have promised in areas which we can control.”
The bank has been applauded for its cost cutting and restructuring following the 2008 financial crisis, axing a quarter of staff and half of its assets.
The bank had hoped that it would be able to shrink its risk-weighted assets, used to measure banks’ capital ratios, to under SFr200bn but regulatory changes will push them to SFr250bn from SFr216bn currently.