Swiss banking giant UBS sees hopeful future, despite losses

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The Swiss bank posted pre-tax losses in the final three months of 2023 but has impressive targets, including increasing dividends.

ANNOUNCEMENT

UBS Group AG posted a pre-tax loss of $751 million (699.7 million euros) in the final three months of last year, as the Swiss banking giant continued to integrate its long-time rival Credit Suisse after a merger orchestrated by the government.

Much of the Zurich-based lender’s losses, $508 million (473 million euros), were linked to an investment in the SIX Group, which runs Switzerland’s main stock market.

Net loss in the quarter was $279 million (€260 million), which translates to a loss of 9 cents per share. The result is even better than investors and market analysts expected, as the bank recorded its second consecutive loss due to the integration of Credit Suisse.

UBS said revenue rose 35% to nearly $10.85 billion (€10.1 billion) in the fourth quarter.

The results partly exceeded expectations: UBS shares were subsequently sold off in large quantities, pushing the price down by more than 2.3 percent at midday in Zurich.

The bank revealed plans to impress investors, including increasing its dividend for the 2023 financial year by 27% (to $0.70 per share) and resuming share buybacks, worth up to 1 billion dollars (930 million euros), in the second half of the year after completing the 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 maintain leadership in global asset management

“As we move to the next phase of our journey, we will focus on restructuring and optimizing the combined businesses,” Chief Executive Officer 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 few months, the bank plans to reduce non-core activities and costs and increase revenue by increasing customer activity.

Above all, the Zurich-based lender expects long-term growth from its investment arm.

UBS highlighted that since the closing of the Credit Suisse acquisition, clients have entrusted the bank with $77 billion (€71.7 billion) in new assets in the wealth management, personal banking and corporate banking segments.

“We aim to increase the assets invested in Global Wealth Management and exceed 5 trillion dollars (4.66 trillion euros) by 2028,” said Ermotti.

“This is in line with our ambition to become the world’s leading asset manager.”

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