By By Helena Smolak
UBS Group, a Swiss bank, has announced its second quarterly net loss in a row due to expenses related to its takeover of Credit Suisse. However, the bank plans to resume share buybacks after completing the initial integration phase of the deal.
Net Loss and Revenue
In the three months ending December, UBS reported a net loss of $279 million. While this loss was narrower than the previous quarter’s net loss of $785 million, it significantly contrasts with the net profit of $1.65 billion in the same period a year ago.
Meanwhile, the bank’s revenue stood at $10.855 billion for the quarter, compared to $8.03 billion in Q4 2022. Although UBS surpassed analysts’ estimates by reporting a net loss of $279 million, it fell short of their revenue projection of $11.04 billion.
Share Buybacks and Integration
Following the completion of the strategic integration of Credit Suisse, UBS plans to reinstate share buybacks. The bank intends to distribute up to $1 billion to shareholders in the second half of this year. The share repurchase will commence after the legal merger of UBS AG and Credit Suisse AG by Q2 2024 and aims to surpass pre-takeover levels by 2026.
In addition to the share buyback program, UBS has increased its 2026 cost-saving goal to $13 billion.
Strategic Outlook
UBS reiterates its three-year strategic plan, which includes a target return on equity of around 15% by the end of 2026. Executives also anticipate a cost-to-income ratio below 70% by the same time frame.
Strong Performance in Wealth Management
Despite the net loss, UBS experienced positive growth in its global wealth management business during Q4. The company reported $21.8 billion in net new assets during the quarter.
Dividend Increase
UBS intends to propose a dividend of $0.70 per share for 2023, an increase from the previous year’s $0.55 per share.
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