For Q3 2025, UBS reported stronger-than-expected profits, driven by strong investment banking performance and the release of legal provisions. Net profit attributable to shareholders stood at $2.5 billion, up 74% from $1.43 billion in the same period of last year.
UBS agreed to acquire Credit Suisse on 19th March 2023 for $3.2 billion. Under the terms of the all-stock deal, Credit Suisse shareholders received 1 UBS share for every 22.48 Credit Suisse shares held, equivalent to CHF 0.76/share. Notably, the acquisition was pushed by Swiss regulators to bail out Credit Suisse from its difficult liquidity position.
Below are key drivers of UBS's value that present opportunities for upside or downside to the current Trefis price estimate for UBS:
UBS is the largest Swiss banking group, offering a strong combination of wealth management, asset management, and investment banking services on a global and regional basis. It delivers a full range of advisory and financial product-related services to its private, corporate, and institutional clients.
The total assets under management (AUM) for the Wealth Management division (Swiss Clients, Americas Clients, and International Clients) are currently three times that of the Asset Management division. The Equity Underwriting & Debt Origination division has seen pressure on fees over recent years for both the Equity Underwriting and Debt Origination sub-divisions. The bank's decision to shrink its bond trading business considerably has reduced the once money-minting unit to a fraction of its former size. These factors make Wealth Management more valuable for UBS.
The AUM for International Clients is currently more than four times that of Swiss Clients. This, coupled with the bank's focus on growing its international business, makes international clients more valuable to its wealth management business.
UBS was the first global banking giant to announce plans to significantly slash its presence in the bond-trading industry to align its business model better with stricter capital requirement norms. As a result, the bank's trading assets for bonds, currencies, and commodities are roughly one-third of its equity trading assets. This makes the equity trading division more valuable for UBS than bonds, currencies, and commodities trading.
With the GDP and per capita income of emerging markets growing rapidly, there is an increasing demand for capital from companies in these markets to support the growing purchasing power of the people. Also, with the integration of these markets with the global economy, there is a shifting trend in these countries from family-run businesses to corporations. As a result of these factors, an increasing number of companies in these markets are going public, leading to a growing demand for equity underwriting services. Additionally, consolidation across different sectors is driving demand for M&A advisory services.
Swiss regulatory requirements are the strictest in the world regarding core capital ratios and leverage ratios. UBS has put in considerable effort over the years to revamp its business model to comply with strict norms, but it has also had to raise a substantial amount of fresh capital. With earnings likely to grow at a modest pace over the coming years, the higher capital base will likely result in lower return on equity (ROE) figures for UBS compared to its other global banking peers.
As economic conditions eventually improve, we expect that investors' risk appetites will also increase, which should drive investment and demand for wealth management services. Long-term trends will also positively impact revenues and assets under management, including the ongoing shift from state pension dependency to private retirement funding, aging populations in mature markets, and growing wealth in emerging economies.
