UBS beats market expectations with fourth quarter profit
Keystone-SDA
UBS reported a bottom-line profit of $770 million (CHF701 million) in the fourth quarter of 2024, exceeding analysts’ expectations after a strong performance at its investment bank.
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In a statement published on Tuesday, UBS added that during the previous year it had suffered a loss of $279 million linked to its integration of Credit Suisse. Before taxes, the UBS earned $1.05 billion after a deficit of $751 million in the fourth quarter of 2023. Adjusted for integration costs, UBS expects a pre-tax profit of $1.77 billion for the period from October to December 2024.
The bank reduced costs by $7.5 billion by the end of the year compared to 2022, including $700 million in the final quarter of 2024. By the end of 2026 or the end of the planned integration of Credit Suisse, the figure is expected to be around $13 billion. At the same time, the integration costs will amount to $14 billion.
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UBS CEO Sergio Ermotti said he was very satisfied overall: “We have reached all key milestones in 2024 and significantly reduced the integration risk, while maintaining a solid capital position.”
The bank confirmed its medium and long-term targets.
Profit for the full year $5.1bn
UBS has reported a profit of $5.09 billion for the full year 2024. In 2023, this total figure was $27 billion, although this was in connection with the takeover of Credit Suisse. The acquisition led to high negative goodwill, as the purchase price was significantly below the book value of Switzerland’s second-largest bank at the time.
UBS shareholders are to receive a 29% higher dividend of $0.90 per share for 2024. For the new financial year it should then increase again by at least 10%, according to the management.
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In addition, share buybacks are to reach up to $3 billion in 2025. Repurchases of $1 billion are planned in the first half of the year. A further $2 billion is to follow in the second half of 2024. However, this is dependent on the capital requirements applicable in Switzerland “not changing directly and significantly”, UBS said.
Declining assets
The bank attracted $18 billion in net new assets in its core business of global wealth management in the fourth quarter. As a result, UBS managed group-wide assets worth $6,087 billion at the end of December – compared to $6,199 billion at the end of September.
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“Investor sentiment remained positive in the fourth quarter of 2024,” according to Tuesday’s statement. “Both institutional and private clients were very active in a market environment characterised by a higher risk appetite in the aftermath of the US presidential election.”
These positive market conditions have continued into the first quarter of 2025, supported by growing optimism about growth prospects in the US.
Nevertheless, the gloomy economic outlook outside the US, increasing uncertainty regarding global trade, inflation and central bank policy as well as geopolitical developments, including the upcoming elections in Germany, could dampen investor behaviour.
Translated from German by DeepL/sb
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