UBS underwhelms with Q4 profit beat, buyback plan
By Benjamin Chiou
Date: Tuesday 04 Feb 2025
(Sharecast News) - Shares in UBS fell sharply on Tuesday despite the Swiss banking group beating forecasts with its fourth-quarter profits and announced plans to buy back $3bn of stock.
Net profit attributable to shareholders totalled $770m in the final three months of 2024, up from a loss of $279m a year earlier, and comfortably ahead of the company-compiled consensus forecast of $483m.
Revenues rose 7% year-on-year to $11.64bn, more or less in line with estimates, as strong equity and FX trading activity during the quarter drove a 44% jump in revenues at its global markets division.
"Throughout 2024, we maintained robust momentum as we captured growth in Global Wealth and Asset Management and gained market share in the Investment Bank in the areas where we have made strategic investments," said chief executive Sergio Ermotti.
The bank, which completed $1bn in share buybacks during 2024 and increased its dividend by 29% to $0.90 a share, said "attractive capital returns" would continue in 2025. A 10% increase in the dividend is planned, along with $1bn of share buybacks in the first half and a further $2bn in the second.
Looking ahead, Ermotti said that UBS would continue to execute on its next phase of the integration of Credit Suisse, which was purchased in 2023. "We are confident in our ability to substantially complete the integration by the end of 2026, achieve our financial targets, and fulfill our growth initiatives as we position UBS for a successful future," he said.
Despite the better-than-expected headline results, the stock was down 5.6% at CHF30.02 by 1122 in Zurich. According to analysts at Citi, results were "decent" but "perhaps not as good as at first glance" due to lower net interest income (NII) year-on-year.
For the first quarter of 2025, UBS pointed to a low-to-mid single digit percentage sequential decline in NII in Global Wealth Management and around a 10% sequential decline in Personal & Corporate Banking's NII, measured in Swiss francs.
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