UBS, the world's biggest private bank, posted a 14 percent year-on-year jump in third-quarter net profit but kept a cautious outlook for the rest of 2017 due to political and monetary policy uncertainty. Silvia Antonioli reports.
Wealthy clients are once again the key to UBS' success European peers such as Deutsche Bank and Barclays disappointed investors with their third quarter results this week but the Swiss bank bucked the trend It posted a 14 percent year-on-year jump in net profit which boosted shares to a 10-month high in early trading. And that was mostly thanks to a pick up in earnings from wealth management. The unit is recovering strongly after a weak 2016, when trading activity by its wealthy clients hit a record low. SOUNDBITE (English) Charles Stanley, Chief Investment Commentator, Garry White "UBS slimmed their investment banking business down which was a very sensible move to do. There are essentially a wealth manager with with this sort of business. The big risk for the investment banks has been in fixed income and commodities trading is not exposed to that so that's a positive." The inflow of new money at its wealth management division was solid despite an outflow in North America. But UBS dampened the mood by saying that dividends will not rise in line with net income growth- which is up more than 30percent so far this year. Management also warned that political and monetary policy uncertainty might make things more difficult for the rest of the year. SOUNDBITE (English) Charles Stanley, Chief Investment Commentator, Garry White "Overall there is low volatility in markets but there could be something upsetting in the future and I think that's what management are cautious about. For clues on how unsettling things might be Investors will likely be keeping a close eye on the ECB's next move.