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UBS surpasses earnings expectations, plans $1 billion share buyback

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Swiss banking giant UBS narrowly beat fourth-quarter earnings expectations, posting a net loss attributable to shareholders of $279 million – its second consecutive loss due to costs associated with integrating Credit Suisse. Despite this, UBS was anticipated to have a larger net loss of $372 million, according to analysts. Chief Executive Sergio Ermotti remarked on the progress of the integration, stating, “In addition, clients entrusted us with USD 77 billion of net new assets since the acquisition and relied on our advice in a challenging geopolitical and macroeconomic environment.” The full merger is expected to be completed by the end of the second quarter, and final steps of integration include UBS embarking on the process of cutting around 3,000 Credit Suisse jobs as part of a wider restructure.

Additionally, UBS announced the recommencement of share buybacks worth up to $1 billion in the second half of the year. The Swiss banking company also plans to propose a dividend per share of $0.70, representing a 27% year-on-year increase. Despite the net loss in the fourth quarter, UBS has reported a quicker than expected return of client inflows to Credit Suisse’s wealth management business since the takeover. The firm has also seen net new assets in the flagship Global Wealth Management division, totaling $77 billion since closing the Credit Suisse acquisition in 2023. Despite this positive news, UBS shares made an indifferent start to 2024, closing Monday’s trade down 1.5% since the turn of the year. UBS will carry out the first phase of the strategic integration, and the full merger is expected to be completed by the end of the second quarter. UBS CEO Sergio Ermotti praised colleagues, noting, “Thanks to the exceptional efforts of all our colleagues, we have stabilized the franchise and made tremendous progress in the integration.” Overall, the banking giant appears to be making notable strides in its recovery and integration process.

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