European banking giants UBS and Standard Chartered reported robust third-quarter earnings, outperforming market expectations and showcasing strategic growth across wealth management and international markets.
While UBS saw profits soar on the back of its integration of Credit Suisse, Standard Chartered leveraged strong performance in its wealth management division to revise its 2024 income guidance upward.
Together, these results underscore a favorable landscape for major European banks navigating evolving markets and competitive pressures.
Standard Chartered’s pre-tax profit surged 37% year-over-year, reaching $1.81 billion and surpassing analyst estimates of $1.59 billion.
The bank’s net interest income of $2.6 billion also outpaced projections.
Buoyed by its wealth management division’s record-breaking performance, the London-headquartered bank raised its 2024 income growth forecast, now expecting operating income to rise by up to 10% in 2024, up from its previous 7% projection.
CEO Bill Winters noted the bank’s focus on enhancing high-returning divisions, highlighting its investments in affluent client services as part of an ongoing shift to target more profitable segments.
Additionally, Standard Chartered’s net interest margin rose to 1.95%, up from 1.63% the previous year.
Though operating expenses increased by 3% due to inflation and business expansion, efficiency gains from the “Fit For Growth” cost-saving initiative, aimed at cutting $1.5 billion over the next three years, helped offset these costs.
Meanwhile, UBS reported a remarkable net profit of $1.43 billion, more than double the $667.5 million analysts expected.
The Swiss bank’s revenue climbed to $12.33 billion, exceeding projections and marking significant progress in its Credit Suisse integration.
Operating profit before tax came in at $1.93 billion, a sharp reversal from the $184 million loss reported in the same period last year.
The bank’s return on tangible equity rose to 7.3%, up from 5.9% in Q2, while its Common Equity Tier 1 (CET1) capital ratio—a measure of financial stability—stood at 14.3%.
UBS is on track to complete a $1 billion share buyback by year-end, with further repurchases anticipated in 2025.
The Credit Suisse merger has also contributed to UBS’s expense reductions, with the bank projecting $7 billion in savings by year-end from the integration, part of its larger $13 billion target by 2026.
Recent client migrations in Luxembourg and Hong Kong underscore UBS’s progress in this transition, with further migrations in Singapore and Japan scheduled for completion by year-end.
CEO Sergio Ermotti is tasked with steering the combined entity amid global economic challenges, including low inflation and a resilient Swiss franc.
As UBS and Standard Chartered navigate economic uncertainty and intensified competition from US rivals, their Q3 results reflect solid progress in wealth management and strategic positioning across key markets.
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