UBS shares declined following the bank’s fourth-quarter results and announcement of up to $3 billion in share buyback plans, which failed to meet expectations. The largest bank in Switzerland reported a net profit attributable to shareholders of $770 million, surpassing the estimated $483 million and falling short of the mean forecast of $886.4 million in a poll of analysts.
Group revenue for the period reached $11.635 billion, slightly below analyst expectations of $11.64 billion. UBS also revealed plans to repurchase $1 billion of shares in the first half of 2025, with an additional $2 billion in the second half of the year, contingent on meeting financial targets and no significant changes to the capital regime in Switzerland.
The bank proposed a dividend of $0.90 per share for the 2024 financial year, marking a 29% increase year-on-year. Despite opening positively, UBS shares were down 5.57% at 9:54 a.m. London time.
Deutsche Bank analysts described the fourth-quarter results as “solid” but noted room for improvement in the divisional mix, particularly in the Personal & Corporate Banking unit. UBS acknowledged an 8% increase in the unit’s performance, driven by improvements in other income offset by lower net interest income.
The bank highlighted strong performance in investment banking, with a 37% increase in underlying revenues year-on-year. The global wealth management division also saw a 10% rise in revenues during the fourth quarter. UBS CEO Sergio Ermotti emphasized the importance of competitiveness in key areas of the investment bank and highlighted growth in market share.
Looking ahead, UBS anticipates a low-to-mid single-digit percentage decline in net interest income for Global Wealth Management in the first quarter, with a steeper 10% drop in the Personal & Corporate Banking division. The bank remains focused on cost savings and restructuring efforts to enhance profitability.
UBS aims to achieve an additional $2.5 billion in gross cost savings this year, aligning with broader expense discipline trends in the European banking sector. The bank’s robust balance sheet and ongoing cost-saving initiatives position it to navigate challenges in the banking landscape effectively.
The Swiss economy faces uncertainties amid global trade tensions and market volatility. UBS continues to monitor economic developments closely and remains prepared to adapt to changing conditions to sustain its financial resilience.
