UBS earnings for the fourth quarter and financial 12 months 2022

UBSFourth-quarter earnings beat market expectations, however the Swiss banking large reported a drop in income on weak buyer exercise and warned of an “unsure” 12 months forward.

The financial institution reported internet earnings of $1.7 billion for the fourth quarter of final 12 months, bringing its full-year revenue to $7.6 billion in 2022. Analysts had anticipated UBS to report internet earnings of $1.3 billion within the fourth quarter and $7.3 billion for the 12 months. , in accordance with information from Refinitiv.

The financial institution’s world wealth administration unit reported a 35% improve in internet curiosity earnings for the fourth quarter over the 12 months, as a result of greater deposit margins on the again of upper rates of interest. The Retail and Company Banking Division additionally recorded a 21% year-on-year rise in internet curiosity earnings throughout the identical interval, on account of greater rates of interest and mortgage earnings.

However market uncertainty has hit the corporate’s funding banking and asset administration arms. The previous noticed income decline 24% year-on-year, whereas asset administration income fell 31% year-on-year as a result of “unfavourable market efficiency and international trade results.”

“The value atmosphere helps the enterprise on one facet, and that offsets a number of the decrease exercise that we’re seeing on the funding facet,” CEO Ralph Hammers advised CNBC’s Jeff Cutmore on Tuesday.

UBS reported fourth quarter and full 12 months earnings.

Fabrice Coverini | Afp | Getty Pictures

He added that there’s a shift within the markets that put stress on the funding facet of the financial institution.

“We’ve seen a transition from what we name a micro focus, which is concentrated on equities, to a macro focus, which is a concentrate on costs,” he mentioned, noting that the Swiss financial institution was not capable of profit from that shift as a lot as a few of its friends, given its smaller presence within the US.

Listed below are another highlights from the outcomes:

  • The Tier 1 capital ratio, a measure of a financial institution’s solvency, was 14.2%, down from 14.4% within the earlier quarter;
  • Whole income fell to $8 billion from $8.7 billion a 12 months in the past;
  • Return on tangible fairness, a measure of banks’ efficiency, rose to 13.2% on the finish of the quarter, from 10% a 12 months in the past.

Trying forward, the Swiss lender mentioned income for the primary quarter of 2023 is ready to be “positively affected” by greater consumer exercise and rates of interest, in addition to by the easing of Covid-19 restrictions in Asia.

Nevertheless, he was cautious in regards to the broader financial outlook, citing central financial institution exercise as a possible catalyst for market volatility.

“Whereas inflation could have peaked within the second half of 2022 and an power disaster seems prone to be averted in Europe, the outlook for financial progress, asset valuation and market volatility stays extremely unsure, and central financial institution tightening may have an effect in the marketplace. Liquidity,” the financial institution mentioned in its earnings assertion.

UBS mentioned it should purchase extra of its shares this 12 months.

“We stay dedicated to a gradual dividend cost and count on to repurchase greater than $5 billion in shares in 2023,” Hammers mentioned in a press release accompanying the outcomes.

Shares within the financial institution have risen about 15% over the previous 12 months.