ZURICH (REUTERS) - UBS, Switzerland's biggest bank, posted a surprise 32 per cent rise in third-quarter net profit amid a bumper quarter for its investment bank and said it aims to grow wealth management profits at the upper end of its target over 2019-2021.
The world's largest wealth manager said it wants earnings in its Global Wealth Management division to expand at the upper end of a 10-15 per cent pre-tax profit target over the next three years while it brings in fresh money at a 2-4 per cent annual rate.
The new targets come as geopolitical jitters and trade tensions have put pressure on the group's main business managing money for the world's wealthy.
Third-quarter earnings were boosted by a 75 per cent jump in investment banking pre-tax profits and strong business in the Americas, which helped offset modest growth in the flagship wealth management division and flattening earnings in other regions.
That helped UBS bring in 1.25 billion Swiss francs (S$1.73 billion) in net profit, far exceeding expectations.
In September, chief executive Sergio Ermotti had warned over declining transactions revenues in the wealth management business, but said the rest of its business was holding up amid a trade war that has weighed on confidence.
"Global economic growth prospects and monetary policy normalisation continue to provide a supportive backdrop to our business, although ongoing geopolitical tensions, rising protectionism and trade disputes have further dampened investor sentiment and confidence," UBS said in a statement on Thursday.
"We expect these latter 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 our institutional business in the Investment Bank."