UBS’s traders are doing well, its bankers not so much

UBS’s third quarter results are out. They look good if you’re a trader. They look less good if you’re a banker there.

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The Swiss bank registered a 27% increase in fixed income in the third quarter, and a 33% increase in equities. The bank attributed the increase to rates and FX, even though rates traders elsewhere did badly.

While traders are on a role, UBS’s investment bankers underperformed. Advisory revenues were up a mere 13% in the third quarter, while pales in comparison to the 133% increase at Deutsche Bank over the same period.

UBS appears to have decided to reward its traders for their efforts. The bank said today that variable pay in the investment bank has increased compared to last year. It needs to. In 2023, UBS reduced bonuses - by at least 30%, depending on where you were in the bank.

UBS still has costs to cut. The bank aspires for a 70% cost income ratio by 2026, but in the investment bank the cost income ratio was 84.4% in Q3, higher than in any other of the bank’s divisions.

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