Fabrice Gaffrini | Afp | Good pictures
Swiss banking giant UBS on Tuesday beat fourth-quarter earnings expectations by far and announced it would buy back $1 billion worth of stock in the second half of the year.
The group posted a net loss attributable to shareholders of $279 million in the quarter, its second straight loss due to the consolidation of collapsed rival Credit Suisse. However, analysts polled by LSEG expected a wider net loss of $372 million.
Along with the share buybacks, UBS plans to propose a dividend of $0.70 per share, up 27% year-over-year.
In the third quarter, UBS attributed a larger-than-expected net loss of $785 million to shareholders — which included $2 billion in costs related to the consolidation of collapsed rival Credit Suisse.
After that third-quarter report, the market chose to focus on the bank's strong underlying operating profit before tax, which beat expectations. In the fourth quarter, it came in at $592 million.
UBS said client inflows to Credit Suisse's wealth management business are returning faster than expected after the acquisition, which is due to close in June 2023.
Consolidation of its embattled rival continues as UBS embarks on a process of cutting around 3,000 Credit Suisse jobs as part of a wider restructuring.
UBS announced on Tuesday that it has completed the first phase of the strategic integration, and the full merger is expected to be completed by the end of the second quarter.
“Thanks to the exceptional efforts of all our colleagues, we have made tremendous progress in securing ownership and integration,” UBS CEO Sergio Ermotti said in a statement.
“In addition, clients have entrusted us with $77 billion in net new assets since the acquisition and have relied on our advice in a challenging geopolitical and macroeconomic environment.”
UPS shares have made an indifferent start to 2024, down 1.5% year-to-date in Monday's trading.
Here are some other highlights:
- The group's total revenue was $10.86 billion, up from $11.7 billion in the third quarter.
- The CET1 capital ratio, a measure of bank liquidity, stood at 14.5%, up from 14.4% in the previous quarter.
- Net new assets at flagship Global Wealth Management were $77 billion, while net new deposits across GWM and the Personal and Corporate Banking division were $77 billion, since completing the Credit Suisse acquisition in 2023.
- In the fourth quarter, GWM net new assets were $21.8 billion.
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