UBS Beats Profit Estimates, Plans $3 Billion Share Repurchase Pending Capital Rules

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UBS Group posted a fourth-quarter profit that significantly exceeded expectations, reporting $770 million in net profit, compared to an average forecast of $483 million. The bank announced plans to repurchase up to $3 billion in shares in 2025, contingent on no major changes to Swiss banking capital rules. UBS intends to buy back $1 billion of shares in the first half of 2025 and up to $2 billion in the second half.

The Swiss government is working on stricter banking regulations to prevent a repeat of Credit Suisse's collapse, potentially requiring UBS to hold more capital. However, UBS argues that current capital requirements are sufficient and cautioned against excessive demands that could harm Switzerland’s financial competitiveness.

UBS also highlighted the successful integration of Credit Suisse, achieving key milestones and reducing execution risks. The bank’s revenues rose 7% year-on-year to $11.6 billion, surpassing the forecast. UBS’s strong performance in its investment banking division and cost control helped boost profits.

Despite raising its integration-related expenses forecast to $14 billion by 2026, UBS remains on track to achieve its cost savings goals and maintain a CET1 ratio of around 14%. The bank attracted $18 billion in new assets in global wealth management, although it fell short of the $21 billion forecast. UBS shares have surged by over 80% since its Credit Suisse acquisition. CEO Sergio Ermotti noted that migrating Credit Suisse clients to UBS’s systems remains a key focus for the next year.

Paraphrasing text from "Investing.com" all rights reserved by the original author.