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UBS Boosts Profitability Ambitions as Cost Savings Exceed Expectations
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Key Takeaways
UBS expects 2026 ROCET1 to exceed 15% and its cost/income ratio to remain below 70%.
UBS's Q3'26 underlying revenues rose 10% year over year, while profit before tax climbed 14%.
UBS achieved $13.2 billion in cost savings and remains on track to complete Credit Suisse integration by 2026.
UBS Group AG (UBS - Free Report) is making strong progress toward its 2026 profitability and efficiency targets. During the third quarter of 2026, UBS reported an underlying return on common equity tier 1 (ROCET1) of 16.7% and an underlying cost/income ratio of 68.7%. In light of these results, management expects to exceed its exit-rate ROCET1 target of approximately 15% and maintain the cost/income ratio below 70% for full-year 2026, as outlined in its 2025 annual report.
Strong revenue growth across UBS's core businesses is supporting its improving profitability. In the third quarter of 2026, underlying revenues increased 10% year over year to $13.4 billion, while underlying profit before tax rose 14% to $4.1 billion. Growth in Global Wealth Management and Investment Banking, driven by client activity and market-related revenues, supported this performance. Global Markets also posted solid revenue growth, while Global Wealth Management continued to attract strong net new assets, supporting UBS's higher-return ambitions.
UBS’ Revenue Trend in Q3
Image Source: UBS Group AG
Alongside this revenue growth, continued cost discipline is supporting UBS's efforts to improve operating efficiency. As of Sept. 30, 2026, the company's cumulative gross cost savings reached $13.2 billion. Management expects the metric to reach nearly $13.7 billion by year-end 2026, exceeding its previous ambition of $13.5 billion. Ongoing restructuring, simplification and tighter cost controls are helping reduce the expense base and further improve the cost/income ratio.
Progress in the Credit Suisse integration (acquired in June 2023) is further supporting the bank's cost-reduction efforts. UBS remains on track to substantially complete the integration by the end of 2026. As of Sept. 30, 2026, approximately 90% of the legacy Credit Suisse IT applications slated for decommissioning had been fully decommissioned, while nearly all the remaining applications were no longer in use. Removing duplicate systems and infrastructure is helping simplify operations, reduce complexity and capture further cost efficiencies from the acquisition.
Overall, strong revenue growth, continued cost discipline and progress in the Credit Suisse integration are supporting UBS's efforts to achieve its 2026 targets. These factors also provide a foundation for the bank's longer-term ambitions of delivering reported ROCET1 of nearly 18% and a reported cost/income ratio of around 67% by 2028. Yet, evolving Swiss capital regulations and the ability to sustain revenue growth while controlling expenses remain key factors to watch.
How Are Other Banks Advancing Their Targets?
Citigroup Inc. (C - Free Report) continues to simplify operations and exit non-core businesses to reduce costs, helping lower its third-quarter 2026 efficiency ratio to 58% from 63.2% in the prior-year quarter. Citigroup now expects the 2026 efficiency ratio to be slightly below 60% compared with its previous target of 60%, while return on common equity tier 1 capital (ROTCE) is expected to exceed 11%, ahead of the earlier 10-11% goal. Looking ahead, Citigroup targets ROTCE of 11%-13% in 2027 and 2028, moving toward the upper end of the range in 2028, and an efficiency ratio of 55-60%, excluding notable items.
Deutsche Bank AG (DB - Free Report) is also making progress toward its 2028 financial targets, supported by revenue growth, a stronger business mix and operating efficiencies. In the third quarter of 2026, Deutsche Bank’s cost/income ratio improved to 62% from 64% in the prior-year quarter, while post-tax return on average tangible shareholders’ equity (ROTE) reached 10.6%. For 2028, Deutsche Bank targets post-tax ROTE of more than 13% and a cost/income ratio below 60%.
UBS’ Price Performance & Zacks Rank
Over the past six months, UBS Group shares have gained 10% on the NYSE compared with the industry’s growth of 5.3%.
View the Zacks #1 Rank List
Image: Shutterstock
UBS Boosts Profitability Ambitions as Cost Savings Exceed Expectations
Key Takeaways
UBS Group AG (UBS - Free Report) is making strong progress toward its 2026 profitability and efficiency targets. During the third quarter of 2026, UBS reported an underlying return on common equity tier 1 (ROCET1) of 16.7% and an underlying cost/income ratio of 68.7%. In light of these results, management expects to exceed its exit-rate ROCET1 target of approximately 15% and maintain the cost/income ratio below 70% for full-year 2026, as outlined in its 2025 annual report.
Strong revenue growth across UBS's core businesses is supporting its improving profitability. In the third quarter of 2026, underlying revenues increased 10% year over year to $13.4 billion, while underlying profit before tax rose 14% to $4.1 billion. Growth in Global Wealth Management and Investment Banking, driven by client activity and market-related revenues, supported this performance. Global Markets also posted solid revenue growth, while Global Wealth Management continued to attract strong net new assets, supporting UBS's higher-return ambitions.
UBS’ Revenue Trend in Q3
Image Source: UBS Group AG
Alongside this revenue growth, continued cost discipline is supporting UBS's efforts to improve operating efficiency. As of Sept. 30, 2026, the company's cumulative gross cost savings reached $13.2 billion. Management expects the metric to reach nearly $13.7 billion by year-end 2026, exceeding its previous ambition of $13.5 billion. Ongoing restructuring, simplification and tighter cost controls are helping reduce the expense base and further improve the cost/income ratio.
Progress in the Credit Suisse integration (acquired in June 2023) is further supporting the bank's cost-reduction efforts. UBS remains on track to substantially complete the integration by the end of 2026. As of Sept. 30, 2026, approximately 90% of the legacy Credit Suisse IT applications slated for decommissioning had been fully decommissioned, while nearly all the remaining applications were no longer in use. Removing duplicate systems and infrastructure is helping simplify operations, reduce complexity and capture further cost efficiencies from the acquisition.
Overall, strong revenue growth, continued cost discipline and progress in the Credit Suisse integration are supporting UBS's efforts to achieve its 2026 targets. These factors also provide a foundation for the bank's longer-term ambitions of delivering reported ROCET1 of nearly 18% and a reported cost/income ratio of around 67% by 2028. Yet, evolving Swiss capital regulations and the ability to sustain revenue growth while controlling expenses remain key factors to watch.
How Are Other Banks Advancing Their Targets?
Citigroup Inc. (C - Free Report) continues to simplify operations and exit non-core businesses to reduce costs, helping lower its third-quarter 2026 efficiency ratio to 58% from 63.2% in the prior-year quarter. Citigroup now expects the 2026 efficiency ratio to be slightly below 60% compared with its previous target of 60%, while return on common equity tier 1 capital (ROTCE) is expected to exceed 11%, ahead of the earlier 10-11% goal. Looking ahead, Citigroup targets ROTCE of 11%-13% in 2027 and 2028, moving toward the upper end of the range in 2028, and an efficiency ratio of 55-60%, excluding notable items.
Deutsche Bank AG (DB - Free Report) is also making progress toward its 2028 financial targets, supported by revenue growth, a stronger business mix and operating efficiencies. In the third quarter of 2026, Deutsche Bank’s cost/income ratio improved to 62% from 64% in the prior-year quarter, while post-tax return on average tangible shareholders’ equity (ROTE) reached 10.6%. For 2028, Deutsche Bank targets post-tax ROTE of more than 13% and a cost/income ratio below 60%.
UBS’ Price Performance & Zacks Rank
Over the past six months, UBS Group shares have gained 10% on the NYSE compared with the industry’s growth of 5.3%.
Price Performance
Image Source: Zacks Investment Research
Currently, UBS carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.