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UBS warned traders that plans for a $3bn buyback this 12 months could possibly be derailed by reforms to the nation’s financial institution capital regime, taking the shine off quarterly earnings that blew previous expectations.
UBS turned the newest world financial institution to learn from the buying and selling frenzy following Donald Trump’s US presidential election victory, with its funding financial institution powering UBS to web earnings of $770mn within the remaining three months of final 12 months, surpassing the $483mn forecast by analysts. Revenues climbed 7 per cent to $11.6bn in contrast with the identical interval a 12 months earlier.
Nevertheless, shares fell greater than 6 per cent in morning buying and selling in Zurich after traders had been underwhelmed by its buyback outlook. UBS stated the plans had been contingent on pending reforms to Switzerland’s financial institution capital guidelines.
On the again of the higher than anticipated outcomes, UBS stated that it could purchase again $1bn of its shares within the first half of 2025 and an extra $2bn within the second half.
Nevertheless, the lender is bracing for a doubtlessly substantial enhance in capital necessities due to reforms to Switzerland’s too-big-to-fail laws. Sergio Ermotti, UBS’s chief government, warned on Tuesday that an “overreaction” by the Swiss authorities may damage UBS’s competitiveness.
“It doesn’t seem like the precise time to do experiments on rising necessities, at a time by which the financial system appears to wish the banking system to be a supply of stability and energy,” Ermotti stated.
UBS stated that it had benefited from sturdy demand from institutional and personal purchasers in the course of the quarter, boosted by a rise in threat urge for food following Trump’s return to the White Home.
Revenues at UBS’s world markets division jumped 44 per cent within the fourth quarter in contrast with the identical interval in 2023, boosted by larger buying and selling exercise in equities and overseas alternate.
The outcomes echo these from Wall Road rivals final month, and are available as French lender BNP Paribas on Tuesday stated {that a} rebound at its funding financial institution helped drive earnings up greater than 15 per cent.
Additionally they mark a fourth consecutive quarter of revenue on the Swiss lender because it continues to combine its former rival Credit Suisse, which it acquired in 2023 in a deal orchestrated by Swiss regulators.
Pre-tax earnings at UBS’s funding financial institution got here in considerably forward of expectations at $486mn, however the financial institution’s wealth administration unit disillusioned with smaller inflows than analysts anticipated.
The wealth administration enterprise — particularly within the crowded however fast-growing US market — is thought to be an necessary a part of its technique to capitalise on its acquisition of Credit Suisse.
UBS added that “constructive market circumstances” continued into the primary quarter of 2025, however warned that investor sentiment could possibly be hit by a “clouded macroeconomic outlook outdoors the US [and] elevated uncertainties round world commerce”.
UBS is in the midst of a three-year integration of Credit score Suisse, which entails migrating purchasers and integrating IT methods, a prolonged course of that the financial institution expects shall be accomplished in 2026.
The migration of nearly all of Swiss accounts and all portfolios in its asset administration enterprise could be accomplished by the top of the 12 months, UBS added.
Final month, Ermotti signalled that he would proceed to chop jobs as the combination progressed. UBS’s headcount swelled from under 75,000 to about 120,000 after it agreed to rescue its crosstown rival almost two years in the past.
The financial institution had about 109,000 full-time workers on the finish of final 12 months, down from 113,000 a 12 months earlier.
Through the remaining quarter of 2023, UBS fell to a $279mn loss because it contended with restructuring prices associated to the combination.
