UBS reported a drop in quarterly profit on Tuesday amid headwinds including negative interest rates and muted investment banking activity.

The largest Swiss bank said net profit attributable to shareholders fell 16% in the third quarter to $1.049 billion while operating income dropped 6.6% to $7 billion.

Net interest income declined 8% from a year ago as UBS passed on the cost of negative interest rates by charging wealthy clients for their deposits. The Swiss central bank has been charging negative rates since 2015 on money it holds on behalf of commercial banks.

“Low and persistent negative interest rates and expectations of further monetary easing will adversely affect net interest income compared with last year,” UBS said in a news release, adding, “Our regional and business diversification, along with actions that we are taking, will help to mitigate these headwinds.”

As Reuters reports, UBS “is running up against a number of headwinds in [its] core markets, as wealthy clients hold back from trading, negative rates eat into margins, and investment banking activity remains muted.”

For the third quarter, the lender’s investment banking unit saw a 59% decline in adjusted operating profit before tax, with advisory revenue down 21% and equity and debt capital markets income down 22% and 15%, respectively.

On the trading side, equities revenue fell 7%, while foreign exchange, rates, and credit revenue was steadier with just a 1% fall.

UBS’ flagship wealth management business saw a 2% decline in adjusted operating profit but brought in net new money of $15.7 billion as a jump in transaction-based income helped restore operational growth.

“We delivered solid results generating attractive returns, considering the market conditions,” CEO Sergio Ermotti said. “We continue to take actions to grow profitability and further capitalize on the strengths of our diversified franchise, delivering long-term value for our clients and shareholders.”

Ermotti told CNBC that UBS had been able to mitigate lower interest rates with higher transaction volumes. The bank also announced a further $90 million in expected annual cost savings on Tuesday.

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