UBS earns $3.6 billion – but Bern holds the key to its capital future

UBS posted a third-quarter pre-tax profit of $3.6 billion and attracted $55 billion in net new assets to its global wealth management business. The results, presented on Wednesday, 28 October, show Switzerland’s largest bank making operational progress as it targets completion of the Credit Suisse integration by year-end. Yet a central question about its future rests with politicians in Bern: how much capital must UBS hold against its foreign subsidiaries?

Group net profit was $2.7 billion, down from $2.8 billion in the second quarter. Pre-tax profit was unchanged. The figures initially failed to lift the shares, which fell almost 2 per cent on Wednesday morning.

For Switzerland, the stakes extend beyond shareholder returns. UBS has become even more important to the financial centre since its emergency takeover of Credit Suisse. The political debate concerns both the bank’s resilience and Switzerland’s attractiveness as a base for its business, with jobs also at stake.

Wealth management drives earnings

Global wealth management generated more than half the profit, with particularly strong inflows in Asia and the Americas. The American business is under scrutiny after client money flowed out in several consecutive quarters in 2025. The latest strong inflows therefore provide an important signal for UBS. The bank now manages $7.3 trillion in assets overall.

The investment bank performed less strongly. Its profit fell by just over a quarter from the second quarter to $838 million. The results underline the uneven performance across the group: wealth management supported earnings while investment banking contributed less than in the previous quarter.

Nevertheless, UBS considers itself on track for the full year. It expects to exceed its return on common equity tier 1 capital targets and meet its cost-to-income ratio targets. Over the first nine months, those measures stood at 16.7 per cent and 69.6 per cent respectively. The cost-to-income ratio measures the share of revenue absorbed by operating costs.

Credit Suisse integration nears completion

UBS also reported progress in combining the two banks and maintains that completing the integration by year-end remains achievable. Almost all legacy applications earmarked for replacement are no longer in use; 90 per cent have been fully decommissioned. A key technical part of the integration is therefore approaching its conclusion.

Cost savings reached $13.2 billion by the end of September, including $600 million added during the third quarter. UBS originally targeted $13.5 billion in savings. It now expects to reach $13.7 billion by year-end, slightly more than initially planned.

For employees, the restructuring has another dimension. At the end of 2022, before Credit Suisse collapsed, the two banks together employed around 123,000 people worldwide. By the end of the third quarter, UBS’s workforce stood at 97,593. Staff reductions are set to continue over several years, while the bank is also bringing previously outsourced functions back in-house.

In Switzerland, UBS employed around 35,000 people at the end of 2023. Chief executive Sergio Ermotti has repeatedly said the integration will lead to 3,000 redundancies in the country. Voluntary departures and early retirements come on top of that. These integration-related changes are distinct from any additional consequences of capital regulation.

Bern weighs financial safety against returns

For months, UBS has opposed stricter capital requirements proposed by the Federal Council, Switzerland’s federal government. The central issue is the capital backing for its foreign subsidiaries. More capital provides a greater cushion against losses. For the bank and its shareholders, the question is also how additional requirements would affect returns and international competitiveness.

On Monday, Ermotti set out his position to the Economic Affairs and Taxation Committee of the National Council, the lower house of Switzerland’s parliament. Presenting the quarterly results, he reiterated that the bank intended to remain “constructive” in the political discussion.

“We hope for a solution in parliament that benefits the country’s financial stability without imposing excessive costs on shareholders, clients and employees, and without undermining UBS’s long-term competitive position,” he said.

Headquarters question raises the pressure

Chairman Colm Kelleher made clear how far the dispute reaches during an appearance in St Gallen in September: “We want a constructive compromise that allows us to stay in Switzerland.” No decision to relocate has been taken. But his statement explicitly links the capital debate to the bank’s future location.

The Swiss Bank Employees Association warned the relevant National Council committee about potential employment consequences. It estimates that a relocation could cost 10,000 to 12,000 of UBS’s current roughly 34,000 Swiss jobs. That is a scenario put forward by the association, not a redundancy programme announced by the bank. The association also criticised the lack of an examination of the employment consequences of a move.

For employees in Switzerland, the distinction matters: the announced integration redundancies and the association’s relocation scenario are not the same. The latter concerns a possible outcome of a headquarters move that has not been decided.

Two separate tasks now dominate the outlook towards year-end. UBS wants to complete the Credit Suisse integration and meet its operating targets. In Bern, parliament must establish a regulatory framework that strengthens financial stability. Despite the solid quarterly figures, the shape of those rules remains the decisive unresolved issue for the bank and Switzerland’s financial centre.