Di, Feb 6th 2024
UBS reports a Q4 2023 loss but plans to increase dividends and resume share buybacks, signaling confidence despite integration challenges post-Credit Suisse acquisition. The bank sees substantial cost savings and records asset inflows, showcasing resilience and strategic progress under uncertain conditions.
UBS once again reports a loss for the final quarter of 2023. Nevertheless, the dividend will be increased significantly, and share buybacks are to be resumed soon.
As announced on Tuesday, the new UBS Group posted a net loss of USD 279 million in the fourth quarter. 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 USD 751 million, which includes a loss of USD 508 million in connection with the investment in SIX Group, according to the press release. On an adjusted basis, UBS forecasts a pre-tax profit of USD 592 million from October to December 2023.
The combined bank has already significantly reduced costs. According to the information provided, around USD 4 billion in costs have already been saved by the end of the 2023 financial year compared to 2022.
Integration costs and the like amounted to 1.8 billion in the fourth quarter.
Meanwhile, UBS reported a record profit of 29.0 billion US dollars for the full year 2023, although this is related to the takeover of Credit Suisse. This led to so-called negative goodwill of 28.9 billion, as the purchase price was significantly below the book value of the second-largest Swiss bank.
UBS shareholders will now 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 up to 1 billion in the current year.
The bank also intends to return much capital to shareholders in the coming years. For the current year, 2024, for example, it is planning to increase the dividend per share in the mid-teens. In addition, the share buybacks in the 2026 financial year are expected to be above 2022.
In the press release, UBS speaks of high client confidence, reflected in the inflow of assets. In the fourth quarter, the bank recorded a net new money inflow of 22 billion dollars in its core business – global wealth management. Since the completion of the CS takeover, this figure has amounted to 77 billion dollars.
As a result, UBS Group-wide assets under management amounted to 5714 billion dollars at the end of December. At the end of September, the figure was 5373 billion.
UBS CEO Sergio Ermotti also expressed his satisfaction: “We were able to stabilize Credit Suisse’s business and have made enormous progress with the integration,” he said in the press release. The path over the next few years will sometimes be straightforward, but the strategy is clear.
As usual, UBS is cautious, as usual, especially as the exact interest rate trend and the course of geopolitical tensions are unclear. It says the strategy and integration plans will continue to be implemented, and the active reduction of certain assets and costs will continue. Seasonal factors are also likely to positively impact earnings in the first quarter.
©Keystone/SDA
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