UBS beats profit expectations, sets new higher targets

• UBS posted net profit attributable to shareholders of $1.35 billion 

• The full-year profit of the Swiss bank stands at $7.46 billion

UBS (NYSE: UBS) on Tuesday reported better-than-expected quarterly profit and set new higher profitability targets.

UBS, though, posted a decline in profit as its net profit attributable to shareholders for the fourth quarter was $1.35 billion, compared to $1.64 billion the prior year and $2.28 billion in the earlier quarter. Analysts had estimated the net profit attributable to shareholders of $863 million.

“The fourth quarter was a very good ending to a record year, the best year in 15 years, both from a pre-tax and a post-tax perspective,” said CEO Ralph Hamers, reported CNBC.

“The markets business held up really well with an operating income of 11% increase year-on-year, we saw net new money in the asset manager at $16 billion and we saw $27 billion of fee-generating assets coming in in the wealth manager,” he said.

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The full-year profit of the Swiss bank stands at $7.46 billion, which is 14% higher than the previous year.

New targets

UBS revised its return on CET1 capital at 15-18%, up from its previous guidance for 12%-15%. The bank also expects its cost-to-income ratio to be 70-73%, compared to previous target of 75%-78%.

“We are aiming to create sustainable value through the cycle. Reflecting our improved operating performance over the last two years, we have updated our financial targets, while our capital guidance remains unchanged,” the bank said in a statement accompanying the results.

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UBS also expects a growth of 10-15% in profit before tax at its wealth management business.

“Our new aspirations, targets and goals will position us to live up to our purpose, better serve clients, deploy technology in differentiated and impactful ways, and open our ecosystem for new and existing clients,” CEO Ralph Hamers added in a statement.

For 2021, UBS offered a dividend of 50 cents per share to shareholders, up from 37 cents in 2020. The bank also aims to buy back shares worth $5 billion in 2022.

Picture Credits: Reuters