UBS Q4 Profit Down, Plans Dividend, $5 Bln Share Buy Back; Stock Up

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Swiss banking giant UBS Group AG reported Tuesday weak profit in its fourth quarter, despite growth in investment bank profit and operating income.

Going ahead, the company projects cost-to-income ratio of 70 percent to 73 percent, and return on CET1 capital of 15 percent to 18 percent. The company also sees 10 percent to 15 percent pre-tax profit growth at wealth management.

Further, the company said it intends to propose a 2021 ordinary dividend of $0.50 per share, and to repurchase up to $5 billion of shares during 2022.

UBS Group shares were gaining above 6 percent in the morning trading in Switzerland and above 5 percent in pre-market activity on the NYSE.

For the fourth quarter, net profit attributable to shareholders was $1.35 billion, down 17.6 percent from last year's $1.64 billion. Earnings per share were $0.38, lower than $0.44 a year ago.

In the quarter, Group profit before tax declined 13 percent from last year to $1.73 billion. Global Wealth Management unit's profit before tax fell 35 percent from last year, and the drop was 17 percent in Asset Management. Meanwhile, profit in Personal & Corporate Banking grew 5 percent from last year and Investment Bank profit climbed 35 percent.

Operating income, however, grew 8 percent to $8.73 billion from prior year's $8.12 billion. Net interest income increased 9 percent to $1.77 billion. Net fee and commission income also increased 9 percent to $5.53 billion.

Operating expenses in the quarter increased 14 percent.

Sequentially, fourth-quarter attributable net profit fell 41 percent, and operating income declined 4 percent

For fiscal 2021, attributable net profit grew 14 percent from last year to $7.46 billion or $2.06 per share, and operating income increased 10 percent to $35.54 billion.

The company said it now manages $4.6 trillion in assets and during 2021, assets invested in sustainability-focus and impact strategies across the firm increased 78 percent.

In Switzerland, UBS Group shares were trading at 18.18 francs, up 6.35 percent.

In pre-market activity on the NYSE, UBS shares were trading at $19.69, up 5.46 percent.

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