By Joshua Franklin
ZURICH (Reuters) - UBS The three months to end-September saw earnings in wealth management again pick up after a sluggish 2016, in which trading activity by the Swiss bank's cadre of wealthy clients plunged to a record low. Nevertheless, faced with the unwinding of the European Central Bank's balance sheet and political tensions including U.S.-North Korea relations, UBS still sees risks which could keep clients from trading. "We expect the global economic recovery to strengthen further, but geopolitical tensions and macroeconomic uncertainty still pose risks to client sentiment," Switzerland's biggest bank said in a statement. "In particular, high asset prices, uncertainty over central bank balance sheet and interest rate policies, seasonality factors and the persistence of low volatility may continue to affect overall client activity." Overall group net profit came in at 946 million Swiss francs ($947.7 million) in the third quarter. This was lower than the median forecast in a Reuters poll of six analysts for 1.04 billion francs but ahead of the Swiss bank's own consensus report published on Oct. 6 for 897 million francs. TAX BOOST Adjusted pre-tax operating profit at its international Wealth Management division rose 9 percent to 701 million francs in the quarter, traditionally a slow period due to the summer break. Net new money inflows - a closely watched indicator of future earnings in money management - totalled 4.6 billion francs at its international wealth management unit and negative $2.3 billion at its North America wealth management business. The investment bank, which UBS has scaled back in recent years to free up resources for wealth management, saw adjusted pre-tax operating profit rise 2.9 percent to 352 million francs. UBS was boosted by a positive impact from deferred tax assets (DTAs) - tax breaks from losses suffered in the financial crisis - of 272 million francs, though this was less than the roughly 400 million franc DTA write-up a year earlier. Group pre-tax income was up 39 percent at 1.2 billion francs. UBS's common equity tier 1 capital ratio, an important measure of balance sheet strength which UBS uses to help decide its dividend, rose to 13.7 percent from 13.5 percent. UBS said it had now achieved 1.9 billion francs of its 2.1 billion francs cost-cutting target and is "on track" to achieve this aim by end-2017. (Reporting by Joshua Franklin; Editing by Michael Shields) (This story has not been edited by Business Standard staff and is auto-generated from a syndicated feed.)