UBS has beaten expectations with its fourth-quarter results and said improved investor confidence should benefit its wealth management business.
The Swiss bank this morning reported a 47 per cent fall in full-year net profits to 3.3bnSFr (£2.6bn), down from 6.2bnSFr in 2015.
In its fourth quarter, net profit came in at 738mSFr, while diluted earnings per share were 0.19SFr.
Net profit for the quarter came in well ahead of expectations, with a Reuters poll of analysts finding a median estimate of 339mSFr.
The bank’s proposed dividend for the year was 0.60SFr, flat on 2015.
Why it’s interesting
UBS’ wealth management division reported a pre-tax profit of 2.4bnSFr, down 15 per cent on 2015.
But the firm appears optimistic for 2017:
Although macroeconomic uncertainty, geopolitical tensions and divisive politics continue to affect client sentiment and transaction volumes, we have begun to observe improved investor confidence, primarily in the US, which may benefit our wealth management businesses. Lower than expected and negative interest rates, particularly in Switzerland and the Eurozone, continue to present headwinds to net interest margins, which may be offset by the effect of higher US dollar interest rates.
Earlier this month, UBS followed other banks in declaring that it is planning to move staff out of London because of Brexit. No further details were contained in today’s results.
What the company said
Group chief executive Sergio Ermotti:
Despite a very challenging market environment in 2016, we achieved solid results, thanks to our balanced business and geographic mix, as well as our strong focus on executing our strategy. Wealth Management Americas delivered a record performance, and our Swiss Personal and Corporate business achieved its best full-year results since 2008. While we saw persistent client risk aversion and substantial cross-border outflows, we generated over 40bn SFr of net new money in our wealth management businesses.