European banks boost profits but fail to match Wall Street boom

{"text":[[{"start":4.96,"text":"UBS, Deutsche Bank and BNP Paribas have reported a rise in third-quarter profits, as some of Europe’s biggest lenders benefited from strong inflows from wealthy clients and resilient corporate and investment banking activity."}],[{"start":22.12,"text":"All three lenders posted profits on Wednesday that met or beat analysts’ expectations in a solid quarter for European banks, but failed to match the blockbuster gains reported by Wall Street rivals in recent weeks."}],[{"start":35.04,"text":"UBS reported an 8 per cent rise in net profit to $2.7bn, as its wealth management business benefited from strong inflows in Asia-Pacific and the Americas. The Swiss lender’s investment bank was also boosted by increased equities trading."}],[{"start":51.16,"text":"Deutsche Bank posted record quarterly net profits of €1.9bn, up 2 per cent from a year earlier, as strong corporate banking performance helped offset weaker investment banking revenues."}],[{"start":62.64,"text":"BNP Paribas reported a 13.5 per cent increase in net profit to €3.5bn, as revenues from its equities and prime services business surged 50 per cent. The French lender also announced a €1.3bn share buyback in a sign of confidence in its outlook as international investors fret about the country’s budget and public finances."}],[{"start":84.64,"text":"The results highlight how Europe’s banking sector, which has enjoyed several years of bumper profits and rising share prices, has continued to generate solid returns against a more difficult economic and geopolitical backdrop."}],[{"start":96.8,"text":"However, while wealth management and trading have boosted earnings at some of the continent’s biggest lenders, they have struggled to match the windfall enjoyed by their Wall Street rivals in recent quarters."}],[{"start":107.68,"text":"BNP, which beat analyst profit forecasts, said its investment bank had a strong quarter, with activity among European clients picking up after months of uncertainty over war in the Middle East."}],[{"start":118.98,"text":"The bank said its core capital ratio would exceed its target of 13 per cent at the end of the year, allowing it to return money to shareholders despite political challenges for French lenders, which are seen as proxies for the country’s wider economy."}],[{"start":133.56,"text":"Investor nerves about France’s fiscal position, street protests and an uncertain presidential election next year have recently sent the country’s long-term borrowing costs above 5 per cent for the first time since 2002."}],[{"start":146.14,"text":"UBS reported pre-tax profits of $3.6bn, up 27 per cent from a year earlier, while revenues rose 5 per cent to $13.4bn. Underlying pre-tax profits of $4.1bn exceeded analysts’ forecasts of $3.8bn."}],[{"start":164.08,"text":"The lender reiterated a commitment to its global business model amid an increasingly heated political debate over proposals to impose tougher capital requirements on the bank."}],[{"start":173.68,"text":"Chief executive Sergio Ermotti urged lawmakers to find a solution that would protect financial stability without imposing “undue costs” on shareholders, clients and employees."}],[{"start":183.88,"text":"UBS said it planned to complete its $3bn share buyback programme before annual results in February, although future distributions remain dependent on the outcome of the Swiss parliamentary debate."}],[{"start":194.94,"text":"Deutsche Bank’s corporate bank was the standout performer as it reported a 4 per cent year-on-year rise in revenue to €8.3bn for the third quarter, while net profit increased 2 per cent to €1.9bn, beating analyst expectations."}],[{"start":209.56,"text":"The German lender also reported a €501mn provision for potential loan losses, a 20 per cent increase that it blamed partly on an “idiosyncratic event” in Asia. This related to the bank’s exposure to an alleged fake-invoice scandal involving Singapore-based iron ore trader Radiant World, according to people familiar with the matter."}],[{"start":228.92,"text":"The lender’s improved performance follows a push by chief executive Christian Sewing to reduce reliance on volatile investment banking revenues. Pre-tax profit rose 11 per cent to €743mn, supported by higher revenues from cash management and payments."}],[{"start":245.14,"text":"Investment banking revenues fell 2 per cent to €2.9bn amid weaker credit trading, although pre-tax profit rose 12 per cent, helped by lower litigation expenses."}],[{"start":null,"text":"

"}],[{"start":255.52,"text":"Santander reported a 2 per cent decline in third-quarter net profit to €3.43bn, as charges of more than €400mn linked to recent acquisitions in the US and UK weighed on the Spanish lender’s bottom line."}],[{"start":269.16,"text":"However, underlying profit rose 19 per cent to €3.85bn, beating analyst expectations. The Spanish bank’s performance was boosted by its first full quarter of earnings from newly acquired British lender TSB and an initial contribution from US bank Webster Financial."}],[{"start":286,"text":"Like UBS, Standard Chartered also reported a rise in third-quarter profits driven by its wealth management and markets businesses. The London-headquartered lender said revenue from its wealth division rose by a quarter compared with the same period in 2025."}],[{"start":303.42,"text":"The Asia-focused bank raised its outlook after posting pre-tax profit of $2.3bn for the third quarter, up 27 per cent year on year and ahead of analyst consensus of $2bn. Revenues rose 13 per cent to $5.8bn."}],[{"start":321.88,"text":"StanChart raised its 2026 guidance for return on tangible equity to “around 14 per cent”, up from “greater than 12 per cent”. It also raised its operating income forecast."}],[{"start":333.68,"text":"The bank’s shares rose 7 per cent in Hong Kong, bringing the rise this year to more than 16 per cent."}],[{"start":340.6,"text":"Early market reaction in Europe was mixed, with Deutsche Bank’s shares rising 3.7 per cent, while UBS and BNP Paribas fell 1.9 per cent and 0.6 per cent respectively. Santander was the worst performer of the group reporting on Wednesday, falling 3.4 per cent in early trading in Madrid."}],[{"start":361.96,"text":"Reporting by Simon Foy in London, Sarah White in Paris, Florian Müller in Frankfurt, Mercedes Ruehl in Zurich and Arjun Neil Alim in Hong Kong"}],[{"start":375.16,"text":""}]],"url":"https://audio.ftcn.net.cn/album/a_1793177266_4809.mp3"}