Benzinga | Oct 20, 2020 05:21AM EDT

UBS Inaugurates European Bank Earnings With Double Profit; Shares Jump 5% Pre-Market

The European investment bank, UBS Group AG (NYSE:UBS), beat earnings expectations for the third quarter 2020 on Tuesday, clocking 99% year-over-year growth in net profit to $2.1 billion, compared to analyst estimates of $1.5 billion, reports CNBC.

Profit before tax of $2.6 billion was 92% higher year-over-year, the best third-quarter performance in a decade driven by performance in Asia and the Americas.

Diluted earnings per share for the quarter was $0.56, and the return on CET1 capital was 21.9%.

Key Highlights For The Quarter Operating income for the quarter was $8.9 billion, growing 25% year-over-year and 20.6% sequentially. UBS attributed the strong performance to its diversified business model along with its broad range of regional mix.

Asset Management division's profit before tax grew six times year-over-year, to $739 million.

As planned, Ralph A.J.G. Hamers will start as the new Chief Executive Officer in November.

"Our ability to focus on clients and achieve such strong financial performance over the first nine months of this year speaks to this. UBS has all the options open to write another successful chapter of its history under Ralph's leadership," group CEO Sergio P. Ermotti said.

The bank has accrued $1 billion through Sept. 30 for its dividend distribution program. The dividend amount will be proposed Annual General Meeting in April 2021.

The second installment of the 2019 dividend of $0.365 per share will be paid on Nov. 27, subject to shareholder approval in the Extraordinary General Meeting.

UBS has set aside $1.5 billion for share repurchases, which it expects to begin in 2021.

Price Action UBS shares are trading 5.27% higher in the pre-market session at last check Tuesday.

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