TLDR
- UBS posted Q4 net profit of $1.2 billion, crushing analyst forecasts by 31%
- Bank launched $3 billion share buyback for 2026 and raised dividend 22% to $1.10
- Invested assets surpassed $7 trillion milestone as integration of Credit Suisse continues
- Cost-saving program expanded by $500 million to $13.5 billion total target
- Wall Street analysts rate the stock a Moderate Buy with 6.73% upside potential
UBS Group reported fourth-quarter net profit of $1.2 billion, soaring 56% from the same period last year. The result came in well above the $919 million analysts expected.
Revenue reached $12.1 billion, meeting Wall Street estimates. The Swiss bank saw strong performance across wealth management, investment banking, and core banking operations.
The bank’s CET1 capital ratio, which measures financial strength, came in at 14.4%. That’s slightly lower than the previous quarter but still solid.
UBS achieved a major milestone during the quarter. Its invested assets crossed $7 trillion for the first time, reinforcing its status as the world’s largest wealth manager.
Share Buyback and Dividend Increase
The bank unveiled a $3 billion share buyback program for 2026. This matches the amount it repurchased in 2025.
UBS indicated it wants to buy back more shares. However, additional buybacks depend on clarity around Switzerland’s future banking regulations.
Swiss authorities have proposed stricter capital requirements following UBS’s emergency takeover of Credit Suisse in 2023. The final rules remain unclear.
The bank also raised its dividend to $1.10 per share. That represents a 22% increase from the previous year.
Credit Suisse Integration Moving Forward
UBS reported “excellent integration progress” with Credit Suisse. Around 85% of Swiss-booked accounts have migrated to UBS systems.
CEO Sergio Ermotti said he’s confident the bank will capture remaining synergies by year-end. The cost-saving program got a boost of $500 million, bringing the total target to $13.5 billion.
Global wealth management added $8.5 billion in net new assets during the quarter. Asia, Europe, and the Middle East showed strong inflows.
The U.S. market presented challenges. The bank experienced outflows there after losing relationship managers.
Future Outlook and Analyst Views
UBS revived a previously dropped target. The bank now aims for an 18% return on CET1 capital by 2028.
It also set a more aggressive cost-income ratio goal of around 67% by 2028. The current target sits below 70%.
For Q1 2026, UBS expects a low single-digit percentage decline in global wealth management’s net interest income. The bank anticipates steady global growth and easing inflation for the year ahead.
Wall Street analysts give UBS a Moderate Buy rating. The consensus includes eight Buys, two Holds, and three Sells.
The average price target stands at $50.88 per share. This implies 6.73% upside from current levels.
Ermotti is expected to step down by mid-2027, though the timeline isn’t finalized. Several internal candidates are being considered as potential successors.
UBS shares fell 1.6% in early trading after the earnings release. The broader European banking index rose 0.2% during the same session.
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