LONDON – UBS, the world’s largest wealth manager, has reported net income of $ 1.771 billion for the fourth quarter of 2020, 137% more than the previous year.
Analysts expected revenue to reach $ 967 million over the three-month period, according to Refinitiv. It comes after the Swiss bank reported a net profit of $ 2.1 billion during the third quarter of last year.
Double-digit profit growth in UBS’s asset management and asset management divisions contributed quarterly performance.
The bank also revealed that it would restart the repurchase of its shares. He announced a new three-year program in which he plans to buy up to 4 billion Swiss francs ($ 4.5 billion) of shares, of which $ 1 billion will be bought during the first quarter of 2021. The rewards offer a way to return cash to companies. to shareholders, along with dividends, and usually coincide with a company’s shares that increase as shares become scarcer.
At a time when banks have been discouraged from paying dividends, UBS also announced that it will propose a 2020 dividend of $ 0.37 per share.
The results are the first under the direction of Ralph Hamers, who took over as CEO on Nov. 1.
Speaking to CNBC on Tuesday, Hamers highlighted a “record number of invested assets of more than $ 1 trillion in the asset manager and more than $ 3 trillion (dollars) in the wealth manager.”
“And basically, this shows you the success of UBS, which is (a) a very strong asset manager, a very strong asset manager (and) if the markets reposition themselves, you see that investment banking does it. it does very well, ”he told CNBC’s Joumanna Bercetche.
Economic uncertainty behind the Covid-19
Despite exceeding analysts ’expectations with its results, UBS was cautious in the economic outlook.
“On the one hand, clearly, there is some light at the end of the tunnel with vaccination programs,” Hamers said.
But he added: “On the other hand, we are in strong blockades, certainly here in Europe as well, so you don’t know what the real impact on the economy is and how the economy will fare from this pandemic.”
The beginning of 2021 has been clouded by stricter social restrictions, mainly in Europe, where governments have also been criticized for the slow deployment of Covid-19 vaccines. There are also concerns about new variants of the coronavirus that are more transmissible and lead to higher levels of infection.
“Recent developments, including economic and political situations in some major economies and geopolitical tensions, have again raised questions about the form and pace of recovery,” the bank said in its earnings report.
Here are other key results metrics:
- Operating income was $ 8.1 billion, up from $ 8.9 billion at the end of the third quarter.
- The Common Equity Tier 1 capital ratio (CET1), a banking solvency metric, was 13.8% compared to 13.5% in the previous quarter.
- The return on tangible assets – a profitability metric – reached 12.9%, compared to 16.2% in the previous quarter.
UBS shares have risen about 3% since the beginning of the year.