Despite a pretax loss this quarter by its Americas wealth management unit, UBS AG, Switzerland’s largest bank, recorded a $1.71 billion net profit and diluted earnings per share of $0.44.

The gains were made despite sharply lower wealth management revenues, which the company credited to a decrease in lower client activity and the strengthening of the Swiss franc against most major currencies. Roughly half that profit, $850 million, was a net tax credit and an own-credit charge of $398.7 million. The company reported before-tax profits of $842.8 million.

The Zurich-based company’s wealth management unit revenue declined 7% compared to the second quarter, with pre-tax profits falling to $506.9 million.  Revenues were affected by unusually low client activity, and a decline in fee income on a lower average invested base.  

Globally, the wealth management arm contributed $506.9 million in pre-tax profit, slightly down $678 million in the second quarter.  Net new inflows amounted to $1.03 billion, drawn Asia Pacific clients and ultra high net worth individuals.

The net new money inflow of $309,100  in the Americas unit was a big improvement over the outflows of $2.68 billion in the second quarter.  The inflows in the Americas unit, however, included $720 million due to the inclusion of certain retirement plan assets.

Revenues in the American wealth management unit declined by 10%, mainly due to currency movements and lower income resulting from lower managed account fees.  In dollar terms, revenue fell 2%.

However, this loss was mitigated by a 7% decline in operating expenses, excluding a $80.4 million arbitration matter and restructuring changes. Its pre-tax loss of $48.4 million represented a 30% improvement over its second quarter loss.

The third quarter operating results also included a $80.4 million provision that resulted from an unexpected result in an arbitration and restructuring charges of $151.5 million.

Profitability shrank slightly, from 95 to 89 basis points, a matter UBS is watching closely. “Improving the profitability of wealth management continues to be a key priority,” said John Cryan, the chief financial officer for the group.

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