UBS posts profits of £1.4bn as banking giant reaps rewards of cost cutting and a reported client exodus from rival Credit Suisse
UBS beat analysts’ profit estimates as a drop in expenses and a significant influx of new assets helped offset a fall in revenue.
UBS’s profits rose 23 per cent to $1.7bn (£1.4bn) in the fourth quarter of the year, ahead of an estimated $1.3bn.
Net interest income at the Swiss lender fell year-on-year compared to the previous fourth quarter, but an eight per cent drop in revenue was offset by a 13 per cent fall in expenses nudging EPS to $0.50 from $0.38.
UBS’ global wealth management business performed best, recording a 88 per cent increase in profit to $1.1bn on the back of higher interest rates. Investment banking revenue fell 84 per cent however to $112m.
UBS’ success came at the expense of its Swiss rival Credit Suisse; a $23bn influx in new fee-generating assets in the fourth quarter alone, bringing new assets for 2022 to $60bn.
In Switzerland, UBS attracted $9bn in new fee-generating assets during 2022.
The Swiss bank maintained a strong capital position, ending the year with a CET1 capital ratio of 14.2 per cent, comfortably higher than the guidance of 13 per cent.
For the financial year 2022, UBS proposed a dividend of $0.55 per share for 2022, 10 per cent higher than last year. It intends to repurchase $5bn of shares in 2023. UBS is
“We delivered good full-year and solid fourth-quarter results in a difficult macroeconomic and geopolitical environment. Our performance proves that our strategy is the right one. Clients turned to us for advice and stability,” Ralph Hamers, Group CEO commented.
European banks are reporting fourth quarter earnings throughout this week and next, with many expecting to post bumper profits on the back of higher interest rates. Credit Suisse is expected to buck that trend and is forecast to post a substantial loss after a turbulent 2022. It publishes its results next Thursday.