UBS posts another loss in the fourth quarter
Published: Tuesday, Feb 6th 2024, 09:21
العودة إلى البث المباشر
UBS once again posted a loss for the final quarter of 2023 due to the takeover of Credit Suisse, but achieved a record accounting profit for the year as a whole. However, the big bank is making progress with the integration.
The new UBS Group posted a net loss of USD 279 million in the fourth quarter, as announced on Tuesday. This is the second quarter in which the acquired CS is fully included. In the third quarter, UBS reported a loss of 785 million.
The pre-tax loss amounted to 751 million, including a loss of 508 million in connection with the investment in SIX Group, according to the press release. On an adjusted basis, UBS is forecasting a pre-tax profit of 592 million for the period from October to December 2023.
Meanwhile, UBS reported a record profit of 29.0 billion for the full year 2023, although this is linked to the takeover of Credit Suisse. This led to so-called negative goodwill of 28.9 billion, as the purchase price was significantly lower than the book value of the second-largest Swiss bank at the time.
Distribution to shareholders
The combined bank has further reduced costs. According to the information provided, costs of around 4 billion dollars have already been saved by the end of the 2023 financial year compared to 2022. A further 4300 jobs were cut in the fourth quarter of 2023. The number of full-time positions at the combined bank of UBS and CS was therefore around 113,00 at the end of December, plus around 25,000 external employees.
The bank aims to save 13 billion on an annual basis by 2026, as it specified on Tuesday. Previously, UBS had set its target for cost savings at more than 10 billion by the end of 2026. Half of the targeted gross savings are to be achieved by the end of 2024.
Integration costs amounted to just under 1.8 billion in the fourth quarter. Overall, UBS expects integration costs of around 13 billion by the end of 2026. Around two thirds of this would be incurred by the end of 2024.
UBS shareholders are now to receive a 27 percent higher dividend of 0.70 dollars per share for 2023. In addition, the share buybacks, which are currently on hold due to the CS takeover, are to be resumed in the second half of 2024 - probably in the amount of up to 1 billion in the current year.
The bank also intends to return a large amount of capital to shareholders in the coming years, including during the integration process. For the current year 2024, for example, it is planning to increase the dividend per share by a mid-teens percentage. In addition, share buybacks in the 2026 financial year are expected to be above the level of 2022, when UBS returned 5.6 billion dollars of capital to its shareholders through share buybacks.
CS business stabilized
The first phase of the integration has been completed, it was announced on Tuesday. "We have been able to stabilize Credit Suisse's business and have made enormous progress with the integration," said UBS CEO Sergio Ermotti according to the press release. The path over the next few years will not always be straightforward, but the strategy is clear.
The high level of client confidence in the bank is reflected in the inflow of assets: UBS recorded a net new money inflow of 22 billion dollars in its core business - global wealth management - in the fourth quarter. Since the takeover of CS was completed, the figure in this area has been 77 billion, and client deposits have since flowed back in the same order of magnitude.
At the end of December, UBS's Global Wealth Management (GWM) assets under management totaled 3,850 billion. It aims to increase this to over 5,000 billion by 2028.
Group-wide assets under management - i.e. including asset management and the Swiss business - amounted to 5714 billion dollars at the end of December. At the end of September, the figure was 5373 billion.
Merger Switzerland business in the third quarter
As usual, UBS is rather cautious about the future, especially as the exact interest rate trend and the course of geopolitical tensions are unclear. However, seasonal factors are likely to have a positive impact on earnings in the first quarter.
The big bank is now focusing on reducing further assets and business areas that UBS wants to exit, as well as further reducing costs. Those CS businesses that the Group does not wish to retain are combined in a "bad bank" called "Non-Core and Legacy". The adjusted pre-tax loss in the run-off unit is expected to amount to around 1 billion dollars by the end of 2026.
The next big step is therefore also the merger of the legal combination of UBS AG and Credit Suisse AG. The big bank expects this to take place by the end of the second quarter of 2024. In Switzerland, the merger of the two local companies is expected to take place before the end of the third quarter, according to reports.
©كيستون/إسدا
Arabic 
English 
German 
French 
Spanish