KGroup boss Sergio Ermotti says goodbye to UBS with a jump in profits. The largest Swiss bank doubled its surplus in the third quarter of 2020 to 2.1 billion dollars – the highest figure in a third quarter in five years. According to a survey by the bank, analysts had expected a profit of 1.56 billion. Proceeds from the sale of the fund distribution platform Fondscenter to Deutsche Börse inflated the result. But day-to-day business also went better than expected, mainly because many customers continued to be very active and thus gave the bank commission fees.
After the round of American institutes, UBS was the first major European bank to report on the summer quarter on Tuesday. Things went particularly well in asset management, in business with professional investors such as pension funds and in investment banking. Only in business with Swiss private and corporate customers did the institute earn less than a year ago. The allowance was down from the previous quarter to $ 89 million. At $ 2.6 billion, UBS achieved the highest pre-tax profit in a third quarter in ten years.
American investment banks such as Morgan Stanley, JP Morgan and Goldman Sachs also benefited from the boom on the stock markets in the summer. Business with bonds and stocks was particularly booming. Deutsche Bank, which will present its quarterly figures on October 28th, has also announced growth in investment banking.
Ermotti leaves the bank much more weatherproof than he found it in 2011. The institute also demonstrated this during the corona pandemic. The worst economic crisis in decades has so far only scratched business. During his time as CEO, Ermotti reduced the risky trading business and focused primarily on the less volatile business with the rich and the super-rich. Chairman of the Board of Directors Axel Weber is now expecting a renewal of the bank from Ermotti’s successor Ralph Hamers. The Dutchman has made a name for himself at ING above all with the digitization of mass business. Skeptics, however, point out that restructuring the business with wealthy private customers based on personal relationships will be more difficult than with small customers.
Hamers cannot count on much tailwind from the market for the time being. The renewed rise in the number of coronavirus cases and growing geopolitical tensions could cloud the growth prospects and dampen investor sentiment, the institute warned.