Ubs scores one annual profit record. Buoyed by robust trading activity from ultra-wealthy clients, the Swiss bank's 2021 net income climbed 13,7% year-on-year to $7,46 billion versus $6,98 billion expected, the its strongest performance since 2006. On the strength of this result, the Zurich giant has announced more ambitious profitability targets and a plan to further cut costs. The Swiss bank then announced a dividend equal to 0,5 dollars for 2021 and a buyback plan for up to 5 billion in 2022. Thus ends the best year for the group and in the meantime the stock celebrates flying to 18,14 Swiss francs (+6,08%).
However, UBS specified that in the last quarter there was a drop of 17,7% to 1,35 billion, with a diluted earnings per share of 0,38 dollars. This is due to the provision of 740 million to cover the sanctions of the controversy in France, according to which the bank would have helped wealthy French customers to evade taxes between 2004 and 2012. Despite this, the figure still proved to be higher than the analysts' estimate of 863 million.
The CEO of Ubs, Ralph Hamers also spoke about the results: “Ubs is in better shape than ever. For the second year in a row we achieved our goals, remained disciplined in our costs and saw strong contributions from all regions and divisions.” And precisely on this momentum the Swiss bank intends to buy back up to 5 billion dollars in shares in 2022, after having spent 2,6 billion dollars in buyback last year.
On the occasion of the quarterly reports, the Zurich giant also updated its strategy: the first major revision since Hamers took office in November 2020. Ubs said it wants to use the tech to increase revenues and reach more customers in the coming years, while continuing to reduce costs. In fact, more ambitious objectives have been set on efficiency and profitability: 70%-73% (against 75%-78%) for its cost-income ratio (ratio between costs and revenues), while the returns generated with the capital "off- core” (Cet1 ratio) is seen at 15%-18%, up from its previous guidance of 12%-15% and ultimately 10-15% pre-tax earnings growth in each of core businesses global asset management. The institution currently manages $4,6 trillion in assets, and during 2021, assets invested in sustainability-focused strategies increased by 78%.
