UBS Q4 Profit Climbs, Lifts Dividend, Plans $5 Bln Buyback; Stock Down

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Swiss banking giant UBS Group AG reported Tuesday a higher profit in its fourth quarter with drop in operating expenses, while revenues were weak. Further, the company lifted its dividend, and said it plans more than $5 billion share repurchase. UBS shares were losing around 3 percent in Swiss trading as well as in pre-market activity on the NYSE.

Looking ahead, Ralph Hamers, UBS's Group CEO, said, "We are starting 2023 from a position of strength. While the macroeconomic outlook remains uncertain, our operational resilience, capital strength and capital generation put us in a great position to serve our clients, fund growth and deliver strong capital returns to shareholders."

For the financial year 2022, the company intends to propose an ordinary dividend of $0.55 per share, up 10 percent from last year. The company also expects to repurchase more than $5 billion of shares during 2023.

In the fourth quarter, UBS' net profit attributable to shareholders was $1.65 billion, up 22.6 percent from last year's $1.35 billion. Earnings per share were $0.50, higher than $0.38 a year ago.

Profit before tax was $1.94 billion, up 12 percent year-over-year as operating expenses decreased 13 percent.

Segment-wise, Global Wealth Management or GWM profit before tax climbed 88 percent from last year to $1.06 billion, and Personal & Corporate Banking or P&C profit grew 51 percent to 504 million Swiss francs. Meanwhile, asset management profit fell 63 percent in the quarter.

Total revenues were down 8 percent to $8.03 billion from prior year's $8.71 billion.

In the quarter, GWM total revenues decreased 5 percent year-over-year to $4.60 billion, and Asset Management revenues were down 31 percent with a 25 percent drop in net management fees.

P&C revenues, however, grew 10 percent as net interest income increased 21 percent.

In fiscal 2022, net profit grew 2 percent year-over-year to $7.63 billion or $2.25 per share, while revenues fell 2 percent to $34.56 billion.

The results were achieved amid a challenging macroeconomic environment, persistent inflation, rapid central bank tightening, the Russia-Ukraine war, the impact of COVID in China, and other geopolitical tensions.

In Switzerland, UBS shares were trading at 19.18 francs, down 3.4 percent. In pre-market activity on the NYSE, the shares were trading at $20.67, down 2.87 percent.

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