ZURICH– UBS Group AG (UBSG.S) reported a 74% year-on-year surge in third-quarter net profit to $2.5 billion, far exceeding analyst expectations of $1.29 billion. The Swiss banking giant’s performance was driven by market volatility stemming from global tariff tensions, a rebound in merger and acquisition (M&A) activity, and the release of legal provisions.

Shares of UBS rose 2.5% in morning trading, buoyed by the strong results and the bank’s reaffirmed confidence in its $3 billion share buyback program and 2026 financial targets.

Strong Profitability Despite Global Headwinds

UBS’s third-quarter earnings marked its best underlying result since its record-breaking second quarter of 2023, when one-off gains related to its Credit Suisse acquisition boosted profit to more than $27 billion.

A $688 million release in legal provisions, tied to the settlement of Credit Suisse’s residential mortgage-backed securities (RMBS) portfolio and a separate UBS case in France, provided a significant boost to the bottom line.

Revenue growth across key business lines also outperformed expectations:

• Global banking revenue rose 52% year-on-year.
• Trading revenue climbed 14%, marking a record third quarter for both divisions.

UBS’s global wealth management unit attracted $38 billion in net new money, while asset management drew an additional $18 billion, pushing total invested assets close to $7 trillion.

Credit Suisse Integration and Legal Developments

UBS confirmed that integration of Credit Suisse is ahead of schedule, with over two-thirds of Swiss-booked client accounts already migrated.

However, the bank faces renewed legal scrutiny over the write-off of 16.5 billion Swiss francs in Credit Suisse AT1 bonds during the 2023 takeover. UBS said it plans to appeal a recent Swiss court ruling that deemed the write-off unlawful but emphasized it has made no financial provisions related to the case.

Market Conditions and Economic Outlook

UBS cautioned that ongoing macroeconomic uncertainty, a strong Swiss franc, and rising U.S. tariffs could pressure growth in the coming quarters. The bank also warned that a prolonged U.S. government shutdown might delay capital market transactions and deal activity.

Still, UBS remains optimistic about sustained M&A momentum into the fourth quarter, even as investor sentiment fluctuates amid global policy volatility.

Capital Requirements and Regulatory Debate

The results come amid growing pressure from Swiss regulators for UBS to raise its core capital levels by approximately $24 billion, a move designed to protect the national economy against potential banking crises.

While UBS continues to lobby for more flexible capital rules, sources have suggested that the Swiss government and the bank may reach a compromise on the final requirements.

Analyst and Investor Reactions

Citi analysts described UBS’s quarterly performance as “strong and ahead of expectations,” though they noted persistent uncertainty regarding the bank’s future structure and regulatory obligations.

UBS’s latest report underscores its growing profitability and resilience following the Credit Suisse integration, positioning the bank as one of Europe’s most robust financial institutions heading into 2026.