The Swiss bank has reported pre-tax losses in the last three months of 2023 but has impressive goals, including raising dividends.
UBS Group AG reported a pretax loss of $751 million (€699.7 million) for the closing three months last year, as the Swiss banking giant continued to integrate its longtime rival Credit Suisse after a government-orchestrated merger.
A big part of the Zurich-based lender’s losses, $508 million (€473 million), was linked to an investment in SIX Group, which operates Switzerland’s main stock market.
The net loss in the quarter came in at $279 million (€260 million), which translates to a loss of 9 cents per share. The result is still better than what investors and market analysts expected, as the bank reported its second consecutive loss due to integrating Credit Suisse.
UBS said revenues jumped 35% to nearly $10.85 billion (€10.1 billion) in the fourth quarter.
Some of the results beat expectations, with UBS shares subsequently sold off in large quantities and driving the price down by more than 2.3% by midday in Zurich.
The bank revealed plans to impress investors, including increasing its dividend for the 2023 financial year by 27% (to $0.70 dividend per share) and resuming share buybacks, worth up to $1 billion (€930 million), in the second half of the year after it has completed its legal merger with Credit Suisse.
UBS said it expects to complete the merger of Credit Suisse by the end of June this year, and the merger of the two banks’ Swiss operations by the end of September 2024.
Big plans to preserve leadership in global wealth management
“As we move to the next phase of our journey, we will focus on restructuring and optimising the combined businesses,” CEO Sergio Ermotti said in a statement. “While our progress over the next three years will not be measured in a straight line, our strategy is clear.”
For the next months, the bank expects to reduce non-core assets and costs and raise revenue by increased client activity.
The Zurich-based lender expects most if its long-term growth from its investment branch.
UBS pointed out that, since the closing of the acquisition of Credit Suisse, clients had entrusted the bank with $77 billion (€71.7 billion) in new assets across its wealth management, personal and corporate banking segments.
“We aim to increase invested assets in Global Wealth Management and surpass $5 trillion (€4.66 trillion) by 2028,” said Ermotti.
“This is in line with our ambition to be the world’s leading wealth manager.”