Tuesday 26 January 2021 7:54 am

UBS cautious on economic outlook despite 137 per cent jump in profit

The world’s largest wealth manager has reported a net income of $1.71bn in the fourth-quarter of 2020, a 137 per cent leap on the previous year.

The Swiss bank praised its own performance in a results statement released this morning but warned of the challenges facing the world in the economic recovery from Covid-19.

All financial targets were met or exceed by UBS in 2020, with a 17.6 per cent return on capital and a full year profit of $8.2bn.

The latest results are the first under the leadership of Ralph Hamers, who took over as the new CEO in November last year.

Hamers said: “Our strong 2020 results clearly demonstrate the true strength of our franchise and the commitment of our employees.

“It was a challenging year for our clients, for our colleagues and for our communities alike, which makes these results even more gratifying.

“We stood for stability, maintained connectivity and provided the advice and solutions our clients needed.

“And, in turn, they entrusted us with their business, with over a hundred billion dollars in net new money.”

Clients continued to put their trust in UBS during a challenging year as they sought stability to navigate them through uncertain times.

Operating income hit $8.1bn, CET1 capital ratio rose 13.8 per cent and tangible equity increased by 12.9 per cent.

UBS shares are up 3 per cent since the start of the year.

Proceeding with caution

The bank added: “Recent developments, including economic and political situations in some large economies and geopolitical tensions, have again raised questions around the shape and pace of the recovery.

“The growing numbers of Covid-19 infections and hospitalizations as well as lockdowns and similar measures imposed to control the pandemic add to existing concerns about the shape of the overall recovery and the severity and duration of the effects of the pandemic in certain economic sectors.

“In these uncertain times, our clients particularly value expert guidance and we remain focused on supporting them with advice and solution.”