ZURICH, Oct 22 (Reuters) - UBS, Switzerland's biggest bank, on Tuesday posted a $1.049 billion net profit for the third quarter of 2019 as it slims its investment bank and cuts costs seeking to tackle difficult market conditions.
The 16% drop put the bank's third-quarter earnings ahead of the median estimate in the bank's own consensus poll for a 22.5% drop to $971 million.
"As we execute on our strategy, we are balancing investments for growth while managing for efficiency," UBS said in a statement.
Profits in its investment bank fell 59% on an adjusted basis, as its business for corporate clients continued to slide.
In an effort to boost earnings and cut costs after tough market conditions precipitated a prolonged performance dip, its investment bank, run by co-heads Piero Novelli and Robert Karofsky, is undergoing an internal reorganisation.
UBS said it expects to take restructuring expenses of around $100 million in the fourth quarter related to structural changes it is making to the business, which includes streamlining and merging its securities and trading activities and reducing headcount.
While the group last year announced targets for a 15% return on common equity for the year and 77% adjusted cost/income ratio, Chief Executive Sergio Ermotti in March hinted the bank faced a steep climb to attain the profitability increase implied by the targets.
Its return on common equity tier 1 (CET1) capital slid to 12.1% in the third quarter, bringing the return down to 13.8% for the first nine months compared to 16.3% over the first nine months of 2018. (Reporting by Brenna Hughes Neghaiwi; Editing by Michael Shields)