By Pietro Lombardi
UBS Group AG has set aside capital reserve of $1.5 billion for buying back its shares after a strong performance at its investment bank, as well as gains from the sale of a business, fueled a sharp increase in quarterly profits, which almost doubled.
The world's largest wealth manager by assets said Tuesday that it expects to be allowed to start buying back shares next year. Besides the buyback, the bank has set aside $1 billion for a cash dividend it expects to propose to shareholders in April. The bank's buyback prospects were a key focus for investors and analysts ahead of the results.
The move comes as Switzerland's largest bank almost doubled its third-quarter net profit, which, at $2.09 billion, was well above analysts' expectations of $1.56 billion. In the same period last year, net profit was $1.05 billion
UBS's investment bank arm had a strong quarter, with the unit's pretax profit more than doubling, mirroring the positive performance of some of the largest banks in the U.S. Global markets revenue were up 42%. The bank's key wealth management unit also posted an 18% growth in pretax profit.
The Swiss bank posted credit losses of $89 million, higher than the same period last year but much lower than the figure posted for the second quarter and below the $201 million analysts had forecast. In the fourth quarter, credit losses should remain much lower than the levels seen in the first half, it said.