LONDON – UBS on Tuesday reported a drop in quarterly profit, but beat analysts’ expectations and set ambitious new profit targets as part of a strategy update.
The Swiss bank posted a net profit attributable to shareholders of $1.35 billion in the fourth quarter. This was down from $1.64 billion a year earlier and also lower than the $2.28 billion reported in the previous quarter.
Analysts had forecast UBS to post net shareholder income of $863 million, according to a consensus published by the bank.
The numbers bring the bank’s full-year profit to $7.46 billion, well above the $6.98 billion consensus compiled by the company.
UBS’s bottom line, however, was hit by a $740 million increase in litigation terms for a French cross-border tax lawsuit. At the end of December, the bank filed an appeal with the French Supreme Court against the decision of the Paris court of appeal to uphold the money laundering charge.
New goal
“We’re moving towards creating sustainable value through the cycle. Reflecting improved performance over the past two years, we’ve updated our financial targets, while guiding our guidance. Our capital remains unchanged,” the bank said in a statement accompanying the results.
In the first major strategy update since CEO Ralph Hamers took the helm in November 2020, UBS said it will aim to reach $6 trillion in its globally invested assets in the following years. asset management, wealth management and personal and corporate banking.
Meanwhile, the bank targets a CET1 return on capital of 15-18% and an expense-to-income ratio of 70-73%. The bank will also target 10-15% pre-tax profit growth in its wealth management business.
“Our new aspirations, goals, and objectives will help us stay true to our purpose, better serve our customers, deploy technology in different and impactful ways, and open up out our ecosystem for new and existing customers,” CEO Ralph Hamers added in a statement.
UBS recommends a shareholder dividend of 50 cents per share for 2021, up from 37 cents in 2020, and aims to buy back $5 billion of its own shares by 2022. way for companies to return cash to shareholders – along with dividends – and often coincides with a company’s stock going higher when shares are scarcer.
This is a breaking news story and will be updated shortly.
