In addition to the share repurchases, UBS intends to propose a dividend of $0.70 per share, marking a 27% increase from the previous year. The bank faced a larger-than-anticipated net loss attributable to shareholders of $785 million in the third quarter, partly due to $2 billion in expenses related to the integration of Credit Suisse, a fallen rival. Despite this, the market focused on the bank’s robust underlying operating profit, which significantly exceeded expectations, reaching $592 million in the fourth quarter. Following the acquisition of Credit Suisse in June 2023, UBS has reported a faster-than-expected return of client inflows to its wealth management business. As part of the broader restructuring, UBS is in the process of cutting around 3,000 jobs from Credit Suisse. The bank has completed the initial phase of the integration and aims to finalize the full merger by the end of the second quarter. UBS CEO Sergio Ermotti praised the efforts of the bank’s employees in stabilizing the franchise and achieving significant progress in the integration. He also highlighted that clients have entrusted the bank with $77 billion of net new assets since the acquisition, demonstrating their confidence in the bank amidst challenging geopolitical and macroeconomic conditions.
UBS shares experienced a lackluster start in 2024, closing Monday’s trade down 1.5% since the beginning of the year. Additional highlights from the report include total group revenues of $10.86 billion, a decrease from $11.7 billion in the previous quarter. The CET1 capital ratio, a measure of the bank’s liquidity, stood at 14.5%, compared to 14.4% in the previous quarter. Notably, net new assets in the Global Wealth Management reached $77 billion, with GWM net new assets amounting to $21.8 billion in the fourth quarter alone. Looking ahead, Morningstar Equity Analyst Johann Scholtz emphasized that as UBS continues to integrate and incur associated costs, investors will shift their focus towards fundamental indicators in the coming years. Scholtz highlighted net new money growth in the wealth management division, particularly in the legacy portion from the Credit Suisse acquisition, as a crucial metric. He explained that this metric provides insights into the ability of the combined entity to retain and potentially regain clients lost by Credit Suisse, as well as the division’s efforts to enhance fee income and return to profitability.
