Back to top

UBS Group CEO Expects Lower Q3 Transaction-Based Revenues

Read MoreHide Full Article

UBS Group AG’s (UBS - Free Report) chief executive office, Sergio Ermotti said that third-quarter revenues are likely to be impacted by lower transaction-based revenues due to ongoing trade war tensions at an investors conference held by the Bank of America. Also, he stated that the bank would continue investing in technology, which should help reducing costs in the future.

Owing to escalated trade war tensions during the third quarter, investors became “insecure”, creating pressure on the transaction line of revenues, which Ermotti expects to be down 10-11%. However, momentum at investment bank is expected to have remained solid during the quarter.

He said, “I look at what’s going on in our investment bank, you know, pretty solid momentum in Q3 – and if I look at the behavior of investors on the transaction line, it is completely the other way around.”

Ermotti noted at the conference that the bank would keep making stable investments on the technology front, over the next few years. Specially, the bank is making great progress at efforts to reduce costs in back-end operations. It expects to have launched 700-800 robots by 2018-end, with 600-700 of them already working.

Technology is likely to lower the cost base of UBS Group going forward, per Ermotti, as it would reduce the need for employees to do repetitive tasks or help them perform more productive operations.

Recently, the bank announced plans to set up an electronic Foreign Exchange (eFX) pricing and trading engine in Singapore and is the first global bank to undertake such a step. The platform is expected to become accessible in the second quarter of 2019.

Per UBS Group’s management, the eFX engine will boost liquidity in foreign exchange market of the Asia-Pacific region, in addition to enhancing the company’s growth prospects.

Key Picks

A few other stocks in the same industry are BNP Paribas SA (BNPQY - Free Report) , Shinhan Financial Group Co Ltd (SHG - Free Report) and KBC Group SA (KBCSY - Free Report) .

Over the past 60 days, the Zacks Consensus Estimate for BNP Paribas’ current-year earnings has been revised 3.1% upward. Its share price has gained 31.1% in the past year.

Shinhan Financial’s earnings estimates for 2018 have been witnessing upward movement over the past 60 days.

Over the past 60 days, KBC Group’s 2018 earnings estimates have moved upward.

Looking for Stocks with Skyrocketing Upside?

Zacks has just released a Special Report on the booming investment opportunities of legal marijuana.

Ignited by new referendums and legislation, this industry is expected to blast from an already robust $6.7 billion to $20.2 billion in 2021. Early investors stand to make a killing, but you have to be ready to act and know just where to look.

See the pot trades we're targeting>>



More from Zacks Analyst Blog

You May Like