UBS: Q4 solid, but heightened uncertainties

(CercleFinance.com) - On Tuesday, UBS reported a better-than-expected net profit for Q4 2024, but also referred to 'increased uncertainties' ahead of FY 2025, which weighed on its share price in Zurich (cp -3.
6%).

The Swiss banking group said it generated net income attributable to shareholders of $770m in Q4, compared with a loss of $279m a year earlier.

In comparison, analysts forecast earnings of around $480m.

As always, the Wealth Management division made the biggest contribution to earnings, with pre-tax profits of $867m.

The Personal & Corporate Banking division generated a profit of 524m CHF, Investment Bank a profit of $479m, and Asset Management a profit of $128m.

In a press release, the company points out that it has achieved its main objectives in terms of integrating Credit Suisse and reducing costs in 2024, with a total of $3.4bn in savings for the year.

Net profit for FY 2024 is $5.1bn.

While it cites continued favorable market conditions in the first quarter of 2025, against a backdrop of optimism about the prospects for
growth in the US, UBS also says it is concerned about 'heightened uncertainties' regarding international trade, inflation, monetary policies as well as the geopolitical situation, starting with the forthcoming elections in Germany.

For the first quarter, the Group anticipates a low-to-mid single-digit sequential decline in net interest income from its Global Wealth Management division.

It also expects a decline of around 10% in net interest income from its Personal & Corporate Banking division, expressed in Swiss francs.

After completing a billion dollars in share buy-backs and increasing its dividend by 29% last year, the bank asserts that the return of capital should remain attractive in 2025.

It states that it is aiming for a dividend increase of around 10% per share, accompanied by a billion dollars in share buy-backs in the first half of the year and up to a further two billion in the second half.

Despite these announcements, UBS shares were down by almost 3% on the Zurich Stock Exchange early Tuesday morning.

In a reaction note, Deutsche Bank analysts hailed the publication as "solid", but also felt that the current valuation of the stock, which is trading at 11.4x earnings by 2026, already incorporates a lot of good news regarding improved profitability.


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