UBS, Standard Chartered and other European banks reported strong third-quarter results. They outperformed market expectations while demonstrating strategic growth in wealth management as well as international markets.
Standard Chartered benefited from a strong performance within its wealth management unit to increase its income forecast for 2024.
These results together provide a positive outlook for the major European banks as they navigate changing markets and competing pressures.
Standard Chartered’s profit before tax grew 37% in the past year, surpassing analysts’ estimates by $1.59 billion.
Net interest income for the bank of $2.6 billion was also higher than expected.
The London-based bank, encouraged by the record-breaking performance of its wealth management division, has raised its income growth projection for 2024. It now expects operating income to increase by as much as 10% by 2024. This is up from its prior 7% forecast.
Bill Winters, CEO of the Bank of America Corporation (BofA), noted that it was focusing on high-returning business divisions and that its investment in services for affluent clients is part if a shift towards targeting more profitable markets.
Standard Chartered also increased its net interest margin to 1.95% from 1.63% in the prior year.
Although operating costs increased by 3% as a result of inflation and expansion in the business, the cost-saving “Fit for Growth” initiative, which aims to save $1.5 billion within the next three year, offset this increase.
UBS also reported an impressive net profit of 1,43 billion dollars, which is more than twice the $667.50 million that analysts had predicted.
Credit Suisse’s integration has made significant strides as the Swiss bank’s revenues have risen to 12,33 billion dollars, surpassing projections.
Operating profit before taxes was $1.93billion, which is a dramatic turnaround from the loss of $184m reported during the same time period in 2013.
Return on tangible equity for the bank rose from 5.9% to 7.3% in Q2 and its Common Equity Tier 1 capital ratio (CET1), a measure of stability financial, remained at 14.3%.
UBS expects to buy back $1 billion worth of shares by the end of this year, and further purchases are expected in 2025.
UBS expects to save $7 billion by the end of the year from its integration with Credit Suisse, as part of a larger target for savings worth $13 billion by 2026.
UBS has made progress with its client migrations, as evidenced by recent migrations to Luxembourg and Hong Kong.
Sergio Ermotti, CEO of the combined company, is responsible for steering it through global economic challenges. These include low inflation rates and a strong Swiss Franc.
UBS and Standard Chartered are navigating economic uncertainty, and the competition of US competitors is intensifying. Their Q3 results show solid progress on wealth management as well as strategic positioning in key markets.
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