SCB X vs UBS: why the prices moved differently

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  Q3 profit seen falling on thinner lending margin Brokers expect SCB's third-quarter profit around 10.8-11.5 billion baht, down roughly 5-10% from a year ago, because interest income shrank after past rate cuts and the margin on loans narrowed. Weaker profit is the main drag on the share price.

  This is the core new earnings picture for the period and directly explains downward pressure on SCB.BK.

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  Floods hit borrowers and add bad-debt risk SCB's research arm says the floods cut Thai growth by up to 0.25 points and hit over a million households and many SMEs. Banks are letting flood-hit customers delay repayments, which trims interest income now and raises the risk some loans go bad later.

  Flood damage is a fresh, concrete force weighing on SCB's earnings and asset quality.

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  Dividend appeal keeps income investors interested SCB pays a 2 baht interim dividend and brokers see a full-year yield near 7%, among the highest in Thai banking. CLSA and Yuanta also name SCB a top pick. Steady payouts put a floor under the stock even while profit falls.

  Dividend strength is the main counterweight supporting SCB.BK against the weak earnings trend.

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  New fee and technology businesses broaden income SCB launched its own AI document analyst CORA, added travel insurance and a savings-insurance product on its app, and expanded card acceptance with American Express. These add fee income and customer ties without lending risk, a slow but real growth stream.

  These new non-lending businesses show where SCB's future income growth comes from beyond squeezed interest margins.

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  Flood relief measures squeeze margins SCB and other banks are letting flood-hit customers delay loan repayments and cutting interest rates. This means SCB earns less interest income for a while, and its profit margin shrinks. The stock fell 2.3% on the day this was announced.

  This is a new event that directly pressures SCB's earnings and was the main reason bank stocks fell.

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  Q3 profit expected to fall 7% year-on-year Two brokers forecast SCB's third-quarter profit at around 11.2 billion baht, down 7% from a year ago. The decline comes from lower interest income after past rate cuts. This weak earnings picture weighs on the stock price.

  New profit forecasts for Q3 directly affect investor expectations for SCB's near-term performance.

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  Rate-cut cycle ending supports future margins Brokers say the long fall in Thai interest rates is over, and net interest margins are starting to stabilise. This means SCB's core lending profit should stop shrinking and may slowly recover, which is a positive for the stock.

  This is a key positive force that offsets the negative profit news and explains why the outlook may improve.

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  SCB provides 68 billion baht credit line to PTT SCB is lending over 68 billion baht to PTT, a large state-owned energy company. This is a big loan that will generate steady interest income for SCB and shows its strong position in corporate lending.

  This new business deal is a concrete positive for SCB's loan book and earnings, not just market sentiment.

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  UBS Upgrades SCB to Buy, Raises Target to 165 Baht UBS upgraded SCB from Hold to Buy and raised its target price to 165 baht, citing lower credit costs, higher earnings forecasts, and a high dividend payout of 80%. This directly boosts investor confidence and the stock's appeal.

  This is a major analyst upgrade that directly drives positive sentiment and price targets for SCB.

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  Fitch Upgrades Thailand Outlook to Stable, Bank Stocks Rally Fitch revised Thailand's credit outlook to Stable, lifting bank stocks including SCB. The upgrade reduces country risk, lowers funding costs, and attracts foreign capital, supporting SCB's valuation and dividend yield appeal.

  The sovereign outlook upgrade improves the operating environment and directly benefits Thai banks like SCB.

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  SCB EIC Warns of Zombie Firms and Weak SME Lending SCB's research arm reports nearly 12% of Thai firms are zombie companies, with SME loans contracting for 16 straight quarters. This signals rising credit risk and weak loan demand, pressuring SCB's asset quality and growth.

  This highlights a key risk to SCB's loan book and profitability, acting as a counterweight to positive drivers.

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  SCB's Loans Flat, Earnings Lag Peers in July-August Bualuang reported SCB's loans slipped 0.1% MoM and July-August earnings were flat, underperforming peers. This reflects sluggish loan growth and earnings momentum, a near-term drag on the stock.

  It provides recent operating data showing SCB's relative weakness, balancing the positive analyst and macro news.

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  Rate-cut cycle seen ending, banks to benefit Brokers now say the long fall in Thai interest rates is over, and US rates are rising too. Higher rates let SCB earn more on loans than it pays depositors, easing the squeeze that cut its profit last quarter. Several houses name SCB among banks that gain.

  This directly reverses the main negative from earlier reports (rate cuts squeezing margins) and is the biggest force behind the stock now.

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  New gold trading platform on SCB EASY app SCB launched a gold marketplace inside its app with three major dealers, letting 17 million users trade gold cheaply. This adds fee income and deepens customer ties without lending risk, a small but real new growth stream beyond traditional banking.

  It is a concrete new business move this period that supports fee income and customer engagement, offsetting weak loan demand.

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  Central bank moves to unlock SME lending The Bank of Thailand is rolling out a credit portal, a new guarantee fund and use of utility bills to judge borrowers, aiming at 200 billion baht of new SME loans a year from late 2026. SCB holds 15% of SME loans, so it should win some of this.

  It shows a regulatory push that could revive loan growth for SCB, a key driver of future interest income.

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  US tariff threat hangs over Thai economy SCB's own research arm warns the US may impose high new Section 301 tariffs on Thailand over excess capacity, with rates due within September. Tariffs would hurt Thai exports and business confidence, which could slow loan demand and raise bad-debt risk for SCB.

  It is the main counterweight this period, a real risk that could undermine the positive rate and lending story.

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  Q2 profit drops 13% on rate cuts SCB's second-quarter profit fell 13% from a year earlier to 11.1 billion baht, as falling Thai interest rates squeezed the gap between what it earns on loans and pays on deposits. Fee income from wealth management grew, but not enough to fully offset the drop.

  This is the core earnings result driving the stock and explains why profit is shrinking.

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  Bad loans and heavy write-offs weigh on asset quality SCB wrote off 14.5 billion baht of bad debt and sold more non-performing loans, yet problem loans still rose over three quarters. Analysts warn provisions will stay high, pressuring future profits and limiting share price upside.

  Asset quality is the key concern flagged by analysts and directly affects future earnings and valuation.

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  Strong capital and highest dividend yield among big banks Despite lower profit, SCB's capital ratio of 18.6% is above regulatory requirements, and analysts name it the top pick for dividends and value among large Thai banks. This income appeal supports the stock even as earnings decline.

  This is the main counterweight keeping investors interested despite weak profit.

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  New lending and NPL sales offset some weakness SCB extended 68 billion baht in credit to PTT Group and provided green loans to Sansiri, supporting future interest income. It also sold a 6-billion-baht bad loan portfolio to BAM, cleaning up its balance sheet. These deals help but don't fix the profit squeeze.

  These deals show SCB is still winning business and managing risk, partially offsetting the negative earnings picture.

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  Credit Suisse integration on track with $13.5B cost savings UBS says it is on track to finish absorbing Credit Suisse by 2026, targeting nearly $13.5 billion in gross cost savings. That supports profits and the share price, though integration costs and legal risks still weigh.

  Shows the core cost story that underpins UBS's earnings and share price.

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  Strong Q2 profit and new buybacks UBS reported a 17% jump in second-quarter net profit and announced new buybacks after strong earnings. Buybacks return cash to shareholders and support the stock, though one valuation model calls the shares roughly fairly priced.

  Profit growth and buybacks are direct supports for the share price.

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  Swiss bonus rules and China fund unit closure Switzerland opened a consultation on stricter bonus deferral and clawback rules for UBS, and UBS is shutting its Shenzhen fund distribution unit at end-September. Both add regulatory cost and reduce a China growth channel, weighing on the shares.

  New regulatory and business-retrenchment news that pressures UBS's outlook.

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  Broker departures drain client assets Merrill Lynch hired a UBS team managing $1.2 billion, and NewEdge Wealth took an eight-person UBS team overseeing $1.25 billion. Losing advisors and client assets hurts UBS's wealth management revenue and makes it harder to grow.

  Competitive talent and asset losses directly threaten UBS's key wealth business.

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  Eight banks approach UBS about a merger as Swiss capital rules bite At least eight major international banks have approached UBS about a possible merger or combination, a Swiss media report says, after the upper house backed stricter capital rules that UBS says could force it to hold roughly $18 billion in extra capital. The interest shows the capital fight could reshape UBS's structure, a negative overhang on the shares.

  This is the first report of concrete outside merger interest, a new development in the capital-rules story that directly affects UBS's structure and value.

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  Artisan Partners urges UBS to leave Switzerland over capital rules Artisan Partners, whose funds own more than 60 million UBS shares, wrote to the board urging UBS to relocate outside Switzerland. It says the proposed rules would raise required core capital from $56 billion to $72 billion, leaving $16 billion earning nothing and costing roughly $36 billion, or about 23%, of UBS's market value. A large shareholder pushing for an exit adds pressure on the stock.

  A major shareholder publicly urging relocation is a new, concrete escalation of the capital-rules threat that directly bears on UBS's value.

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  Morgan Stanley reported to explore merger with UBS Morgan Stanley is reportedly exploring a merger or combination with UBS under pressure from Swiss regulators to strengthen its capital. Such a deal would be one of the largest cross-border bank mergers ever, adding a deep European and wealth footprint. It could put surplus capital to work, but a bigger, more complex balance sheet risks fresh regulatory demands and distracts from the core business.

  A reported merger with a top-tier US bank is a new, potentially transformative event that cuts both ways for UBS's price.

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  UBS research calls on emerging markets and oil keep its market voice strong UBS said emerging markets can absorb a hawkish Fed and sees EM earnings up over 60% in 2026, and separately forecast global oil demand rising into the 2030s, led by India and other emerging markets. These widely followed calls support UBS's research and advisory franchise, which can attract client assets and trading activity, a modest positive.

  These are new UBS house views that reinforce its research franchise, a recurring but genuine driver of client activity and earnings.

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  Swiss capital vote raises UBS's burden and exit risk Switzerland's upper house voted on Sept 23 to require UBS to back foreign units with 90% top-quality capital, adding about $16 billion, or roughly $33 billion in total extra capital and $2.5 billion a year in cost. UBS is now reportedly weighing moving its headquarters abroad or merging with a foreign bank, a serious threat to the shares.

  This is the biggest new event of the period and directly threatens UBS's costs, buybacks and domicile.

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  Ermotti's last-minute lobbying fails to stop stricter rules Before the vote, CEO Sergio Ermotti publicly urged lawmakers to soften the plan, calling the full requirement excessive and warning costs would hit customers and staff. Lawmakers instead rejected the cheaper AT1 compromise, showing UBS has little political room to shape the outcome — a negative for the stock.

  It shows the company's own pushback did not work, making the regulatory hit more likely to stick.

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  UBS raises AI spending forecast, reinforcing its market voice UBS now sees AI capital spending near $1 trillion in 2026 and $1.4 trillion in 2027, with memory chips driving most of the increase. Big, widely followed calls like this support UBS's research and advisory franchise, which can attract client assets and trading activity — a modest positive.

  It is a new, high-profile UBS forecast that supports its investment-bank credibility and client flows.

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  Fresh commodity and stock calls keep UBS in the analyst spotlight UBS raised palladium forecasts on tight supply, kept a Neutral rating on Tesla with about 470,000 third-quarter deliveries expected, and cut Nike's target to $42 on weak sales. These calls show an active research house but carry reputational risk if wrong, so the net effect on the shares is limited and mixed.

  It captures the remaining new analyst actions that shape UBS's franchise reputation, without overstating their price impact.

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  Swiss franc stablecoin pilot advances UBS's CHFD stablecoin pilot with SIX and TWINT moved into testing, building on its earlier bank-consortium stablecoin plan. This opens a new digital-payments business and shows UBS keeping pace with rivals, a modest positive for future revenue and the share price.

  It is a concrete new step in UBS's digital-money strategy that can add future revenue.

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  UBS now expects two Fed hikes, CEO warns of complacency UBS flipped its Fed call to two 25bp hikes this year, and CEO Ermotti said markets are too calm and expects more tightening from the Fed, ECB and BOJ. Higher rates can lift trading and lending income but also cool client activity and markets, so the effect on UBS is mixed.

  It is a new, company-voiced macro view that shapes UBS's earnings backdrop.

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  UBS says Fed hike won't derail equity rally After the Fed raised rates to 3.75%-4.00%, UBS told clients the tightening is mostly priced in and stuck to bullish calls: AI capital spending reaching $1.2 trillion in 2027 and S&P 500 profit growth of 25% in 2026. A confident house view supports its advisory and trading franchise.

  It shows UBS's core market call staying bullish, which supports client activity and its own earnings.

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  UBS cuts Nike target, warns on earnings UBS lowered its Nike price target to $42 from $48 and expects Nike to miss earnings and cut guidance. A high-profile bearish call can hurt UBS's research reputation and client trust, a modest negative for the stock.

  It is a new UBS analyst call that could affect its research credibility and client relationships.

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  Swiss capital reform softened, easing UBS's burden Swiss lawmakers are moving a softer bank reform that would let UBS back foreign units with less capital than originally planned. This reduces how much extra money UBS must tie up, freeing cash for buybacks and growth, and removes a big cloud over the stock.

  This is the most direct new regulatory change affecting UBS's capital and buyback capacity.

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  UBS joins 21-bank stablecoin venture UBS is part of a 21-bank group launching a stablecoin company in late 2026, using public blockchains under new US rules. This opens a new digital-payments business and shows UBS is keeping pace with rivals, a modest positive for future revenue.

  It is a new business initiative that could add a new revenue stream and improve UBS's competitive position.

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  UBS stays bullish on markets and gold UBS told clients record corporate earnings, not hype, are driving the bull market, and set a gold target of $5,200 by mid-2027. Bullish calls reinforce its research and trading credibility, which can attract more client assets and support earnings.

  These are new public forecasts that shape UBS's reputation and client flows.

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  Fed rate uncertainty keeps a lid on sentiment UBS expects the Fed to hold rates in September, but flagged that strong jobs or inflation data could force a hike. If the ECB raises rates while the Fed doesn't, the euro could rise, which is a mixed backdrop for UBS's cross-border earnings and client activity.

  It is the main new macro risk that could affect UBS's business and stock sentiment.

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  Swiss capital rule uncertainty persists A Swiss parliamentary committee failed to agree on new capital rules that would force UBS to hold an extra $20 billion. UBS says this is excessive and hurts competitiveness. The delay keeps a cloud over the stock, as the final outcome could tie up capital that might otherwise fund buybacks or growth.

  This is a key regulatory overhang that directly affects UBS's capital and profitability, and the committee's failure to agree means the issue remains unresolved.

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  New $125 million US fine for AML failures UBS was fined $125 million by US regulators for anti-money-laundering failures, the largest-ever civil fine under the main US AML law and a repeat offense. While the amount is small versus profits, it signals ongoing compliance problems, raises costs, and could invite further scrutiny, weighing on the stock.

  This is a new regulatory penalty that adds to UBS's compliance burden and reputational risk, directly impacting investor sentiment.

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  UBS raises S&P 500 target, sees broad opportunities UBS lifted its S&P 500 year-end target to 8,100 and urged investors to diversify beyond US tech into Europe, Japan, and Asia. This bullish view reflects confidence in its own advisory and trading businesses, and could attract more client assets, supporting the share price.

  UBS's own market forecasts influence its investment banking and wealth management revenues, and a positive outlook can boost investor confidence in the stock.

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  Hong Kong GDP upgrade on AI demand UBS raised its 2026 Hong Kong GDP forecast to 4.5% from 3.3%, citing strong AI-driven exports. Faster growth in a key wealth market can boost demand for UBS's services and improve its regional earnings outlook, a positive for the stock.

  Hong Kong is a major market for UBS's wealth management, and stronger economic growth there can lead to more client activity and assets.

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  Record Q2 profit and $3B buyback UBS earned $2.8 billion in Q2 2026, up from $2.39 billion a year earlier, with wealth management attracting $36 billion in new client money and the investment bank doubling profit. It announced a $3 billion share buyback, which shrinks the number of shares and supports the price.

  This is the period's biggest new event and directly lifts the shares through earnings and buyback demand.

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  Cost savings from Credit Suisse integration near target UBS has now cut $12.6 billion in gross costs, close to its $13.5 billion goal, and found another $1.1 billion in run-rate savings. Lower costs mean more of each revenue dollar becomes profit, which supports the share price.

  New cost-reduction figures show the integration is delivering, a key driver of the profit beat.

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  $153 million US fine for anti-money laundering failures Three US regulators fined UBS $153 million for failing to monitor over 50,000 foreign currency wires worth more than $10 billion and for weak checks on high-risk customers. The fine is small versus profits, but it forces costly fixes and raises regulatory risk.

  This is the period's main negative and a real counterweight to the strong earnings.

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  European banks re-rated as UBS rivals Wall Street UBS's pre-tax profit rose 47% to $3.6 billion, putting it on par with top US banks, and it trades at a premium multiple reflecting its wealth franchise. This sector re-rating draws investors to European bank shares, including UBS.

  Shows the wider market backdrop that is pushing UBS shares higher beyond its own results.

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  UBS tests Ethereum compliance for regulated digital assets UBS and Nethermind completed proofs of concept showing Ethereum can meet bank compliance rules. This positions UBS as a leader in regulated digital assets, potentially attracting new clients and fee income, which supports the share price.

  New technology milestone that could open a new revenue stream and enhance UBS's competitive edge.

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  UBS raises STOXX Europe 600 target, signaling confidence UBS lifted its year-end 2026 target for the STOXX Europe 600 to 690 from 630, citing resilient earnings and AI-driven gains. This reflects UBS's positive market view, which can boost its own trading and advisory businesses and lift investor sentiment toward the stock.

  Directly shows UBS's own analysts becoming more optimistic, which can drive client activity and revenue.

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  UBS joins SWIFT blockchain ledger with 17 banks UBS is among 17 banks launching SWIFT's blockchain ledger for 24/7 tokenized fund transfers. This modernizes UBS's payment infrastructure, potentially increasing efficiency and fee income, and keeps it competitive against stablecoin threats.

  New industry initiative where UBS is a key participant, likely to improve its transaction services and market position.

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  UBS partners with MSCI for AI-powered private markets platform UBS and MSCI are building an AI platform to standardize private market data and connect investors. This addresses transparency issues and could attract more assets to UBS's alternatives business, a growing profit source. However, higher Swiss capital requirements and Credit Suisse integration risks remain a drag.

  New partnership that enhances UBS's product offering and addresses a key client need, though regulatory challenges persist.

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  UBS cuts AI portfolio risk after rally UBS trimmed its AI strategy's semiconductor and hardware weighting to about 61% from 76%, locking in profits after a strong June rally, and shifted into defensive AI names like data centers and telcos. This reduces the risk of a sharp pullback hitting UBS's own investment products and client portfolios.

  Directly shows UBS actively managing its own AI exposure, a key driver of its investment banking and wealth management revenue.

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  Fed stress test shows UBS America flush with capital The Fed's annual stress test found UBS America held the most capital of any major US bank at 15.5%, far above the 4.5% minimum, even in a severe recession. This strengthens UBS's reputation for safety and could reduce regulatory pressure on capital returns.

  A strong stress test result directly boosts investor confidence in UBS's financial stability and regulatory standing.

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  UBS sees calmer markets supporting equities and credit UBS analysts expect volatility to fall, prompting trend-following funds to buy more stocks and credit, which supports UBS's trading and advisory businesses. However, they warn that any setback in US-Iran talks could trigger outflows, so the support is not guaranteed.

  UBS's own market outlook affects client activity and trading revenue, a core earnings driver.

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  UBS cuts oil supply loss estimate, easing price pressure UBS reduced its estimate of oil supply lost in Q3 by 5 million barrels per day, as the Strait of Hormuz recovers faster than expected. Brent crude has fallen to about $78 from a wartime peak near $120, which lowers inflation risk but also reduces demand for UBS's commodity hedging and advisory services.

  Lower oil prices and reduced disruption affect UBS's commodity-related client activity and overall market sentiment.

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