UBS Group AG on Tuesday reported a surprise rise in fourth-quarter profit as its wealth-management arm attracted billions in new client money, offsetting a slump at its investment bank amid macroeconomic headwinds.
The Swiss bank
reported a net profit of $1.65 billion in the three months to the end of December, up from $1.35 billion for the same period a year earlier.
Revenue was $8.03 billion compared with $8.71 billion in the fourth quarter of 2021.
It meant the Zurich-based bank beat 4Q estimates of net profit of $1.28 billion and revenue at $7.98 billion, according to analysts’ consensus provided by the company.
UBS said it took on $23.3 billion in net new fee-generating assets at its key wealth-management business in the quarter, at a time when its local rival Credit Suisse Group AG had struggled with client withdrawals.
Profit before tax at wealth management jumped 88% to $1.06 billion, it added.
It also attracted $25 billion in net new money at its asset-management business, UBS said.
But at its investment bank, profit before tax tumbled to around $100 million, down 84%, as dealmaking slumped.
The bank cited persistent inflation, rapid central bank tightening, the Ukraine war, and geopolitical tensions that affected asset-pricing levels and investor sentiment in the year.
“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,” Chief Executive Ralph Hamers said.
Its common equity tier 1 ratio, a measure of financial strength, at the end of December was 14.2%, down from 14.4% at the third quarter.
The company said it would propose a dividend of $0.55 for 2022, a 10% year-on-year increase.
The lender added that it would remain committed to a progressive dividend and expects to repurchase more than $5 billion of shares in 2023, after $5.6 billion in 2022.
Write to Ed Frankl at [email protected]