LONDON — UBS on Tuesday reported a fall in quarterly revenue, however beat analyst expectations and set formidable new profitability targets as a part of a strategic replace.
The Swiss financial institution posted web revenue attributable to shareholders of $1.35 billion for the fourth quarter. This was down from $1.64 billion a yr earlier, and likewise decrease than the $2.28 billion reported the earlier quarter.
Analysts had forecast UBS to put up web earnings attributable to shareholders of $863 million, in line with the consensus revealed by the financial institution.
“The fourth quarter was an excellent ending to a document yr, the most effective yr in 15 years, each from a pre-tax and a post-tax perspective,” CEO Ralph Hamers instructed CNBC on Tuesday.
“The markets enterprise held up rather well with an working earnings of 11% improve year-on-year, we noticed web new cash within the asset supervisor at $16 billion and we noticed $27 billion of fee-generating property coming in within the wealth supervisor.”
The quarterly figures take the financial institution’s full-year revenue to $7.46 billion, above a company-compiled consensus of $6.98 billion and 14% larger than the earlier yr.
Nonetheless, UBS’ backside line was hit by a rise of $740 million in litigation provisions for a French cross-border tax case. In late December, the bank filed an appeal with France’s Supreme Court towards a call by a Paris appeals court docket to uphold a cash laundering conviction, though with a diminished penalty.
Hamers stated the financial institution was nonetheless assessing how finest to strategy the continuing enchantment towards the ruling.
“Given the truth that you may have one other verdict right here, we additionally regarded on the total case, whether or not we would have liked to vary the supply that we already had,” he instructed CNBC.
“Our greatest estimate at this second in time, when it comes to what could possibly be payable at a sure second in time, is 1.1 billion euro [$1.24 billion], and due to this fact we needed to improve our provisioning by one other 650 million euros, which is $740 million.”
Listed below are different highlights for the third quarter:
- CET 1 ratio, a measure of financial institution solvency, reached 15.0% versus 14.9% within the earlier three months.
- Working earnings got here in at $8.73 billion versus $9.1 billion within the earlier quarter.
- Return on fairness, a measure of economic efficiency, stood at 8.9% from 15.3% within the third quarter of 2021.
“We’re aiming to create sustainable worth by way of the cycle. Reflecting our improved working efficiency over the past two years, we’ve got up to date our monetary targets, whereas our capital steerage stays unchanged,” the financial institution stated in a press release accompanying the outcomes.
In its first main strategic replace since Hamers took the reins in Nov. 2020, UBS stated it would purpose for $6 trillion in invested property throughout its world wealth administration, asset administration and private and company banking divisions.
In the meantime the financial institution set the goal vary for its return on CET1 capital at 15-18% and cost-to-income ratio at 70-73%. The financial institution will even purpose for 10-15% progress in revenue earlier than tax at its wealth administration enterprise.
“Our new aspirations, targets and objectives will place us to reside as much as our function, higher serve shoppers, deploy know-how in differentiated and impactful methods, and open our ecosystem for brand spanking new and current shoppers,” CEO Ralph Hamers added in a press release.
UBS proposed a dividend to shareholders of fifty cents per share for 2021, rising from 37 cents in 2020, and goals to purchase again $5 billion value of its personal shares in 2022. Buybacks supply a manner for corporations to return money to shareholders — together with dividends — and often coincide with an organization’s inventory pushing larger as shares get scarcer.