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UBS Group (UBS) to Post Q3 Earnings: What's in the Cards?

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UBS Group AG (UBS - Free Report) is scheduled to report third-quarter 2017 results on Oct 27. The results might benefit from equity market rally and improved consumer sentiments during the quarter. However, persistent low rate environment is likely to weigh on the bank’s revenues.

The Swiss banking giant’s second-quarter 2017 net profit attributable to common shareholders increased 13.6% year over year. Results primarily benefited from increase in net interest income and net fees and commissions. Further, the company’s efficient expense management initiatives led to stable expenses on a year-over-year basis.

Looking at the price performance, UBS stock has gained 11.1% year to date, underperforming the 19.1% rally of its industry.

Will the stock be able to maintain its uptrend post Q3 earnings release? It majorly depends on whether the firm is able to impress the market with its results.

Factors That Might Influence Q3 Results

The company’s profitability is likely to be hit by the lingering negative interest rate environment which was adopted by the Swiss National Bank in late 2014 to boost growth and inflation of the economy.

The economic improvement in Europe, as is evident from rising consumer sentiment and GDP, is expected to benefit the bank.

The Wealth Management division might benefit to some extent from the company’s consistent focus on loan growth.

Revenues from advisory and underwriting might be on the lower side due to decrease in M&A activities during the quarter. However, the equity market remained strong and might support UBS Group’s bottom line.

UBS AG Price and Consensus

UBS currently carries a Zacks Rank #5 (Strong Sell).

You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Among other foreign banks, Royal Bank of Scotland Group is scheduled to report results on Oct 27 while Deutsche Bank AG (DB - Free Report) and Barclays PLC (BCS - Free Report) will release results on Oct 26.

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