UBS Q4 Profit Down, Plans Dividend, $5 Bln Share Buy Back; Stock Up

Swiss banking giant UBS Group AG reported Tuesday weak profit in its fourth quarter, despite growth in investment bank profit and operating income.

Going ahead, the company projects cost-to-income ratio of 70 percent to 73 percent, and return on CET1 capital of 15 percent to 18 percent. The company also sees 10 percent to 15 percent pre-tax profit growth at wealth management.

Further, the company said it intends to propose a 2021 ordinary dividend of $0.50 per share, and to repurchase up to $5 billion of shares during 2022.

UBS Group shares were gaining above 6 percent in the morning trading in Switzerland and above 5 percent in pre-market activity on the NYSE.

For the fourth quarter, net profit attributable to shareholders was $1.35 billion, down 17.6 percent from last year’s $1.64 billion. Earnings per share were $0.38, lower than $0.44 a year ago.

In the quarter, Group profit before tax declined 13 percent from last year to $1.73 billion. Global Wealth Management unit’s profit before tax fell 35 percent from last year, and the drop was 17 percent in Asset Management. Meanwhile, profit in Personal & Corporate Banking grew 5 percent from last year and Investment Bank profit climbed 35 percent.

Operating income, however, grew 8 percent to $8.73 billion from prior year’s $8.12 billion. Net interest income increased 9 percent to $1.77 billion. Net fee and commission income also increased 9 percent to $5.53 billion.

Operating expenses in the quarter increased 14 percent.

Sequentially, fourth-quarter attributable net profit fell 41 percent, and operating income declined 4 percent

For fiscal 2021, attributable net profit grew 14 percent from last year to $7.46 billion or $2.06 per share, and operating income increased 10 percent to $35.54 billion.

The company said it now manages $4.6 trillion in assets and during 2021, assets invested in sustainability-focus and impact strategies across the firm increased 78 percent.

In Switzerland, UBS Group shares were trading at 18.18 francs, up 6.35 percent.

In pre-market activity on the NYSE, UBS shares were trading at $19.69, up 5.46 percent.

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