- ORIGINAL NEWS
UBS beats earnings expectations, announces up to $1 billion share buyback
- SUMMARY
UBS, a Swiss banking giant, reported its fourth-quarter earnings, revealing a second consecutive loss of $279 million, partly attributed to the ongoing integration costs of its acquired rival, Credit Suisse.
However, this loss was narrower than the expected $372 million loss, which eased the concerns of analysts.
The highlight of the report was UBS’s strong underlying operating profit before tax, which surpassed expectations at $592 million, despite falling short of the projected $762 million.
This gave investors confidence in the bank’s overall financial health.
UBS plans to initiate share buybacks worth up to $1 billion in the second half of the year and propose a dividend per share of $0.70, marking a 27% increase year-over-year.
The integration of Credit Suisse continues, with progress in returning client inflows to its wealth management business.
However, the bank faces challenges in cutting around 3,000 jobs and completing the merger, which is expected by the end of the second quarter.
Analysts believe that the market will focus on fundamental indicators like net new money growth, particularly in the Credit Suisse legacy portion of the wealth management division, rather than solely relying on headline figures, given the ongoing integration costs.
- NEWS SENTIMENT CHECK
- Overall sentiment:
positive
Positive
“Swiss banking giant UBS on Tuesday narrowly beat fourth-quarter earnings expectations and announced that it would recommence share buybacks worth up to $1 billion in the second half of the year.”
“Total group revenues were $10.86 billion, down from $11.7 billion in the third quarter.”
Negative
“The group posted a net loss attributable to shareholders of $279 million for the quarter, its second consecutive loss due to the costs of integrating fallen rival Credit Suisse.”
“UBS shares have made an indifferent start to 2024, and were down 3.3% in early trade on Tuesday.”