UBS stated its plans for a $3 billion buyback on Wednesday and reported fourth-quarter profits that exceeded analysts’ projections. The Swiss banking giant has indicated that it seeks to buyback at least $3 billion of shares by 2026, but it’s planning to acquire more.
The net profit that could be attributed to shareholders increased by 56 percent year-on-year to a total of $1.2 billion within the last three months of the year. This was much more than the estimates given by analysts of $919 million.
In general, its group revenues stood at $12.1 billion during the last quarter of the year, as compared to the $12.1 billion that the analysts predicted. It also decreased to 12.8 billion in the last quarter and increased to $11.6 billion for the same period in the previous year.
However, the shares of UBS fell by 5 percent on Wednesday morning. Johann Scholtz, senior equity analyst at Morningstar, said that the fourth-quarter earnings were another good result for the bank.
In an interview with CNBC, “Europe Early Edition” on Wednesday, Scholtz stated that UBS executed well on the Credit Suisse integration. But he warned that there remains “a bit of an overhang” on the bank’s share price from Switzerland’s capital requirements regulations.
Therefore, UBS’ common equity tier (CET) 1 capital ratio, a gauge of a bank’s solvency, was 14.4 percent for the fourth quarter, in comparison to 14.8 percent in the previous quarter.
The bank reported invested assets have always hit their highest point of about $7 trillion, and the bank is bound to get its 2026 rate of exit and an enhanced dividend with share buybacks.
CEO Sergio Ermotti added that the global wealth management and investment banking units performed fairly, with the former recording net new assets of $101 billion, and the Swiss business of the bank is reported to be holding up well against the negative rate environment.
Accepting the fact of the recent market volatility, where precious metals suffered a sudden sell-off earlier this week, Ermotti added that clients are in no way complacent, but there has been no significant shift in asset allocation.
He said in an interview with CNBC’s Carolin Roth, “They are looking for protection, they are shying away a little bit from the tech sector lately. The volatility we see, and the rapid changes in the geopolitical landscape almost every day, is making is making clients really think about diversification more and more.”
He said that high inflows in Europe and Asia were used to counter the weakness in the Americas, where outflows were at $14 billion in the U.S.
Ermotti, who came back to leading the largest lender in Switzerland in 2023 to manage the emergency nationalization of the fallen Swiss competitor Credit Suisse, said earlier that the bank has achieved “great progress” on “one of the most complex integrations in banking history.”
