UBS Group AG (NYSE: UBS) released its third-quarter 2026 financial results on October 28.
Net profit attributable to shareholders for the quarter came in at $2.69 billion, up 8% year over year, slightly below the roughly $2.71 billion consensus estimate compiled by the company. Diluted earnings per share were $0.85, compared with $0.76 a year earlier. Pre-tax profit reached $3.587 billion, up 27% year over year, while underlying pre-tax profit excluding special items rose 14% to $4.077 billion. Total revenue grew 5% to $13.350 billion.
By segment, Global Wealth Management underlying revenue increased 8% year over year to $6.898 billion, with recurring net fee income up 9% and net interest income up 8%. The quarter saw $55.1 billion in net new assets, an annualized growth rate of 4.5%, with the strongest inflows coming from Asia-Pacific and the Americas. Group invested assets reached $7.3 trillion.
The Investment Bank posted a record third-quarter underlying revenue, with Global Markets revenue climbing 17% to $2.548 billion, including a 22% increase in equities. Pre-tax profit in the Americas rose 28% year over year, with the pre-tax profit margin improving by more than 2 percentage points to 16%. Personal and Corporate Banking in Switzerland recorded CHF 3.3 billion in net new loans and CHF 1.8 billion in net new deposits.
On capital and returns, the CET1 capital ratio stood at 14.7%, compared with 14.8% a year earlier and 14.4% in the prior quarter, while the CET1 leverage ratio was 4.6%. The cost-to-income ratio was 72.3%, or 68.7% on an underlying basis. The bank repurchased $1.8 billion in shares during the quarter and plans to complete its $3 billion buyback program before reporting fourth-quarter results, rather than by mid-2027 as previously announced, while continuing to accrue dividends at a "low-teens" percentage increase.
The Credit Suisse integration is nearing completion, with cumulative gross cost savings of $13.2 billion, including $600 million added in the third quarter. The bank added that integration of its former rival is proceeding on schedule and is expected to be completed by the end of the year, with cumulative cost savings projected at approximately $13.7 billion by the end of 2026, above the previous estimate of about $13.5 billion. Roughly 90% of legacy IT applications earmarked for disposal have been decommissioned.
The company said its nine-month underlying return on CET1 capital was 16.7% and its underlying cost-to-income ratio was 69.6%, putting it on track to surpass its 2026 exit-rate target of roughly 15% underlying RoCET1. Looking ahead to the fourth quarter, UBS expects a "more typical seasonal slowdown" in trading volumes. Global Markets faces a year-over-year headwind from a high base that included disposal gains in the prior-year period, while Global Banking revenue is expected to grow quarter over quarter and Wealth Management net interest income is seen rising by a low single-digit percentage sequentially.
CEO Sergio Ermotti said that amid an increasingly complex market environment, the results once again demonstrate the advantages of a diversified global business model and disciplined execution. As the integration progresses, the bank's full-time headcount fell by nearly 1,500 during the quarter. UBS said its employees now run more than 12,700 private AI agents, and the bank will continue to increase investment in the technology.
The bank has tied the size and pace of its share buybacks to the outcome of Swiss banking rule reforms, which followed the collapse of Credit Suisse in 2023 and UBS's emergency takeover orchestrated by the state. The new capital rules for UBS are currently being debated in a parliamentary committee and are expected to be submitted to the lower house in December. Switzerland's upper house proposed the rules last month, but UBS considers them unacceptable. UBS's chairman has warned that if capital requirements are too stringent, the bank would need to seriously consider its future in Switzerland, and some shareholders have also called on UBS to exit the country. In its earnings report, UBS said it hopes parliament can find a solution that supports Swiss financial stability without imposing excessive costs on UBS's shareholders, clients and employees.
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