AT1 Risk Is Weighing on UBS Despite Good Results, JPMorgan Says

Investors in UBS Group AG are put off by the legal uncertainty around previously canceled debt known as AT1 bonds, according to JPMorgan analyst Kian Abouhossein.

“The focus currently is the potential legal risk for UBS” stemming from a recent court ruling concerning the AT1 bonds, Abouhossein said by email when asked about a drop in UBS shares after third-quarter earnings that largely beat consensus estimates.

That’s despite otherwise “excellent results” from UBS, he said.

UBS’s stock had risen as much as 4% after the earnings were published earlier Wednesday, but then started dropping. They were down 0.9% at ...