UBS registers 41% Y/Y jump in Forex, Rates and Credit revenues in Q3 2020
UBS Group AG (SWX:UBSG) today released its financial results for the third quarter of 2020, revealing a steep rise in revenues in the Global Markets segment.
Global Markets revenues increased by USD 550 million, or 42%, to USD 1,849 million, including a USD 215 million gain on the sale of intellectual property rights associated with the Bloomberg Commodity Index family. Excluding this gain, Global Markets revenues increased by USD 335 million, or 26%, to USD 1,634 million, primarily driven by higher client activity levels, resulting from market volatility, particularly across equity derivatives, credit, foreign exchange and cash equities.
In the third quarter of 2020, Foreign Exchange, Rates and Credit revenues increased by USD 156 million, or 41%, to USD 533 million, supported by increased client activity levels, particularly in credit and Forex product lines.
For the first nine months of 2020, Foreign Exchange, Rates and Credit revenues increased by USD 1,057 million, or 87%, to USD 2,270 million, on the back of higher levels of client activity.
In the third quarter of 2020, Execution & Platform revenues increased by USD 64 million, or 18%, to USD 418 million, mainly driven by higher client activity levels in cash equities and fixed-income products that are traded over electronic platforms.
Derivatives & Solutions revenues jumped by USD 467 million, or 85%, to USD 1,017 million, in part reflecting the aforementioned USD 215 million gain on the sale of intellectual property rights associated with the Bloomberg Commodity Index family. The remainder of the increase, amounting to USD 252 million, or 46%, reflected higher client activity levels across equity derivatives, credit, foreign exchange and rates products.
Financing revenues increased by USD 18 million, or 5%, to USD 413 million, due to higher revenues in Equity Financing.
Equities revenues increased by USD 394 million, or 43%, to USD 1,315 million, mainly reflecting the aforementioned USD 215 million gain on the sale of intellectual property rights associated with the Bloomberg Commodity Index family, as well as increases in equity derivatives and cash equities revenues.
Across all segments, profit before tax (PBT) for the third quarter of 2020 was USD 2,578 million, up 92% year-over-year, or +41% on an adjusted basis to USD 2,053 million. Net profit attributable to shareholders was USD 2,093 million, up 99% from the same period a year earlier. Return on CET1 capital (RoCET1) was 21.9%.
Regarding dividends, UBS said that the second instalment of the 2019 dividend is to be paid to UBS Group AG shareholders on November 27, 2020, subject to shareholder approval at an Extraordinary General Meeting (EGM) on November 19, 2020. This follows the decision at the April 2020 Annual General Meeting (AGM) to split the distribution of the 2019 dividend into two equal instalments of USD 0.365 per share, consistent with a request by FINMA to Swiss banks in light of the uncertainty caused by COVID-19. 50% of this second distribution will be paid out of the capital contribution reserves and 50% will be paid out of retained earnings (same as with the first distribution in May 2020).