Shares of UBS Group AG (UBS) were gaining around 3 percent in Switzerland after the Swiss banking giant reported Thursday significant growth in its third-quarter earnings mainly on the strength of Investment Bank results. The company also reaffirmed its strategy and ambitions, and outlined plans for profit growth by 2021.
The firm expects to grow revenues at least as fast as real GDP growth, while delivering positive operating leverage.
The company said it will intensify its focus on delivering growth with further emphasis on capital and cost efficiency.
UBS said it remains strongly positioned to benefit from positive long-term secular growth trends, including global wealth creation and economic expansion in Asia Pacific.
The company reaffirmed its plan to deliver 10-15% pre-tax profit growth over the cycle in its Global Wealth Management business division.
UBS’s ambition is to grow profits at the upper end of the target range over the 2019-2021 period. The business division will also target net new money growth of 2-4% per annum while aiming for at least 3% growth by 2021.
The bank targets to grow its ordinary dividend per share at mid-to-high single digit percent per annum. The bank expects to return excess capital, after dividend accruals, likely in the form of share repurchases after considering its outlook and subject to regulatory approval.
Over the period, UBS expects to keep costs broadly flat, excluding performance-driven variable compensation, while funding significant investments for growth.
Further, the company said Edmund Koh and Markus Ronner will join Group Executive Board of UBS, while Kathy Shih will retire at year-end.
Koh will take over as President UBS Asia Pacific and join the Group Executive Board of UBS Group AG effective January 1,2019, following the decision of Shih to retire after 32 years at UBS.
Ronner will join the Group Executive Board of UBS Group AG effective November 1, 2018 as Head of Group Compliance, Regulatory and Governance.
For the third quarter, UBS’ net profit attributable to shareholders was 1.25 billion Swiss francs, up 32% from 946 million francs a year ago. Earnings per share were 0.32 francs, higher than 0.25 francs last year.
UBS’ profit before tax climbed 37% year over year to 1.67 billion francs, and adjusted profit before tax grew 15% to 1.73 billion francs.
Operating income was 7.28 billion francs, up from 7.15 billion francs last year.
Beginning in the fourth quarter of 2018, UBS Group AG will change its presentation currency to US dollars.
Looking ahead, the company noted that ongoing geopolitical tensions, rising protectionism and trade disputes have further dampened investor sentiment and confidence. The company sees these trends to continue to impact Global Wealth Management clients’ transaction activity in the fourth quarter; however, moderately increased levels of volatility and volumes are generally positive for institutional business in the Investment Bank.
In Switzerland, UBS shares were trading at 13.58 francs, up 2.53 percent. In pre-market activity on the NYSE, shares were trading at $13.59, up 2.9 percent.