Swiss loans to UBS declined 16% year-on-year in its third quarter earnings and 59% decline in investment banking amid a "challenging environment".
The bank's net profit attributable to shareholders in the third quarter is $ 1.049 billion. That's lower than the $ 1.2 billion reported in the same quarter of 2018.
Here are some of the highlights for the quarter:
- Operating income reached $ 7 billion versus $ 7.5 billion a year ago
- Return on tangible equity amounted to 8.7% versus 11.1
- Tier 1 ratio of 13.1% versus 13.5% a year ago
UBS also said it expects to incur restructuring costs of $ 100 million in the fourth quarter of 2019. UBS, similar to its using Internet looking for ways to restructure, as banks continue to shrink and to face winds of low and negative interest rates.
"Low and persistent negative interest rates and expectations for further cash relief will have a negative impact on interest income compared to last year," UBS said in a statement Tuesday.
"As we execute our strategy, balancing investment for growth while managing efficiency, "adds UBS.
Rising rates are good for banks as they are ab lending investors money at a favorable interest rate. Lower interest rates limit a bank's ability to make money.
UBS announced in August that it would introduce a 0.6% annual fee for savings of more than 500,000 euros ($ 557,652.50) and 0.75% for savings more than 2 million Swiss francs ($ 2.03 million) to pass on the price of negative interest rates.
In a speech to CNBC on Tuesday, CEO Sergio Ermotti said: "The whole industry is facing the same challenge in terms of negative rates, so unfortunately forced to go through some of that pain so we're not really ahead Wammen all the pain of negative rates, but I think it is inevitable to see the rest of the industry that follows thereafter. "
UBS continues to face wind advances in its investment banking and global wealth management business.
The lender's investment banking business saw a 59% decline in the third quarter of 2019. with respect to operating profit before tax (adjusted), which decreased from CHF 507 million ($ 505 million) to $ 203 million, compared to the same quarter last year.
Investment banking is a specific division of banking.
Meanwhile, the bank's global wealth management business saw 8 declines in% compared to the same quarter last year.
of the bank with net interest rates and recurring fee income, Ermotti said the lender has been able to mitigate the lower interest rates with a larger volume of transactions and is seeking to safeguard this dynamic.
"When I look at recurring fees, of course there, you can see that our clients' appetite is affecting recurring fees. We see them still buying mandates, but with a lower risk profile, therefore with a lower risk profile margins and in that sense, it was useful in the third quarter to see that the transaction line offset some of that, "he told CNBC's Joumanna Bercetche.
– CNBC's Elliott Smith contributed to this report.