UBS Group AG Earnings - Q3 2025 Analysis & Highlights
Key Takeaways
UBS Group AG's Q3 2025 earnings call highlighted strong financial performance driven by momentum in core businesses and disciplined execution of strategic priorities. Key topics included invested asset growth, integration progress, cost savings, capital strength, and strategic investments in technology and US banking capabilities. The call also addressed the macroeconomic and regulatory environment, providing insights into the outlook for the fourth quarter and beyond.
Key Financial Results
Net profit of $2.5 billion, up 74%.
Earnings per share of $0.76.
Underlying pre-tax profit of $3.6 billion, up 50% with 5% revenue growth.
Return on CET1 capital of 16.3%.
Excluding litigation, return on CET1 capital was 12.7%.
Invested assets reached nearly $7 trillion across the group.
Asset Management surpassed $2 trillion in invested assets for the first time.
Tangible book value per share grew sequentially by 2% to $26.54.
Business Segment Results
Global Wealth Management (GWM): Pre-tax profit of $1.8 billion. Excluding litigation, profit before tax was $1.6 billion, up 21% year-over-year.
Personal & Corporate Banking (P&C): Pre-tax profit of CHF 668 million, up 1%.
Asset Management (AM): Pre-tax profit of $282 million, up 19% year-on-year.
Investment Bank (IB): Pre-tax profit of $787 million, more than double year-on-year. Return on attributed equity of 17%.
Non-core and Legacy (NCL): Pre-tax profit was $102 million, with negative revenues of $42 million.
Capital Allocation
Intention to execute share buybacks during 2026.
Full year 2025 dividend will be accrued in capital.
Active issuers during the quarter, capitalizing on favorable market conditions.
Placed around $3 billion ins and over $7 billion in Holdco, both at attractive levels.
Industry Trends and Dynamics
Investors focused on managing downside risks amid elevated valuations across most asset classes.
Transactional activity and deal pipelines remain healthy.
Competition in the US wealth management business.
Competitive Landscape
UBS's unique global footprint and capabilities.
Strategic investments in expanding global reach and strengthening talent, technology, and capabilities in the Investment Bank.
Close partnership between the Investment Bank and Global Wealth Management.
Macroeconomic Environment
Macro uncertainties along with a strong Swiss franc and higher US tariffs are clouding the outlook for the Swiss economy.
A prolonged US government shutdown may delay capital market activities.
Swiss franc net interest income increased by 1%, driven by lower funding costs and deposit pricing measures, offsetting the impact of the 25-basis-point rate cut announced in June.
Growth Opportunities and Strategies
Strategic investing across the platform to position UBS for sustainable growth.
Filed application for a national bank charter in the US, expecting approval in 2026.
Advancing AI capabilities with 340 live AI use cases across the bank.
Integration of Asset Management is substantially completed.
Streamlining operations, nearly halfway through application decommissioning roadmap.
Financial Guidance and Outlook
Expect year-end 2025 CET1 capital ratio to decrease sequentially, driven by an accrual for intended share repurchases in 2026, as well as the full year 2025 dividend.
Expect tax rate to normalize in Q4, resulting in a low double-digit effective tax rate for full year 2025.
Expect moderately lower levels of cost to achieve in the fourth quarter as the Swiss platform migration program enters its final stretch.
Expect more modest gross and net saves in the fourth quarter due to the Swiss platform migration and a seasonal uptick in select non-personnel items.
Expect banking activity to normalize from Q3's exceptional levels.
Expect more normalized levels of transactional volumes in global markets in Q4.
For the fourth quarter, expect CLE to be around CHF 80 million, reflecting continuing global macro uncertainties that are also affecting Switzerland.
Expect net interest income to be broadly stable sequentially in 4Q.
