Top firm boss says big London job moves "more and more unlikely"

'Our target is to keep as many people as we we can in London'.

Swiss bank UBS reported profits up 14 per cent Friday, despite a weaker performance from its wealth management business in the Americas and personal and corporate banking.Meanwhile UBS chief executive Sergio Ermotti said "regulatory and political clarifications" had made it "more and more unlikely" that bank will move 1,000 jobs out of London, according to the Financial Times.

“Our target is to keep as many people as we we can in London,” he said, according to the FT.

The figures

Net attributable profit was 946m Swiss francs (£721m), with adjusted profits – which strip out the effects of costs bosses believe are one-offs – up by 16 per cent to reach 1.5bn francs.

In its global wealth management division adjusted profits before tax rose by four per cent year-on-year to one billion francs, as a nine per cent boost outside the Americas made up for a four per cent dip in the latter region. The bank said the lower profits in the Americas division were accounted for by higher wages and investments.

Profits at the personal and corporate banking division fell by eight per cent year-on-year, in spite of a 3.7 per cent volume growth in personal banking, the best third quarter in a decade.

Why it's interesting

The bank warned that "geopolitical tensions and macroeconomic uncertainty" remain risks which could knock it off track, in spite of expectations of a stronger global recovery.

Even in an improving economic environment, low interest rates in the Eurozone and Switzerland have also held back the prospects for UBS to raise net interest income, although a large US exposure may offset some of that weakness as the Federal Reserve raises rates.

UBS also faces cost headwinds, with its cost to income ratio rising from 79 per cent to 83 per cent over the quarter.

Axel Pierron, managing director of capital markets management consultancy Opimas, said: "While the Swiss bank's cost-reduction strategy is delivering the expected savings – already $1.9bn on a $2.1bn target for 2017 – something more will be required for UBS to improve its unsatisfactory cost-income ratio of 83 per cent."

Meanwhile UBS joined the global trend for lower investment bank trading revenues after the boost from volatility following last June's Brexit vote which benefited bank profits.

What UBS said

Sergio Ermotti, UBS group chief executive, said:

We again saw good results across our business divisions with Asia Pacific as an important driver of profitable growth.

He added: "We remain focused on disciplined execution and creating long-term value for our shareholders.”

Full story: UBS profits up as boss says big London job moves "more and more unlikely": City A.M.

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