UBS reported a full-year net profit of $7.49 billion, up 14 percent year-on-year, citing favorable market conditions and investor sentiment.
Operating income came in at $35.42 billion for the year, up 9.73 percent from the previous, the bank said in a press release. «UBS is in better shape than ever. For the second year in a row, we achieved our targets, remained disciplined in our costs and saw strong contributions from all regions and divisions,» Ralph Hamers, UBS’ group CEO, said in the statement.
Morningstar had forecast full-year net income would come in at $7.71 billion on revenue of $35.50 billion, as of 26 October.
Uncertain Outlook
UBS issued a cautious outlook, even as it noted investor sentiment ended 2021 positively amid a rebound in the economy. «The continued uncertainty about the environment, including renewed geopolitical concerns, and economic recovery could affect both asset prices and client activity levels,» the Swiss bank said, pointing to high rates of Covid-19 infections and related disruptions, including inflation and supply chain disruptions.
For the first quarter of this year, UBS said its revenue would be affected by seasonal factors, such as higher client activity compared with the fourth quarter. «Asset prices remain high, supporting recurring fee income in our asset-gathering businesses,» the bank said.
Rewarding Shareholders
Despite the uncertainty, UBS rewarded shareholders. The bank proposed a dividend of $0.50 a share, up from $0.37 for 2020.
In addition, UBS said it planned a new share buyback program of up to $6 billion over 2022 to 2024, with up to $5 billion of repurchased under the existing and new programs by the end of this year. The shares are expected to be canceled as part of a capital reduction, the bank said.
Concerns on Litigation
Operating expenses were up 8 percent on-yar, partly due to litigation provisions of $740 million, or 650 million euros, for the French cross-border matter. In December, UBS was found guilty of unlawful solicitation and aggravated laundering of the proceeds of tax fraud in its cross-border business activity in France from 2004 to 2012; the court imposed a fine of 3.75 million euros and ordered the confiscation of 1 billion euros and awarded civil damages of 800 million euros to the French state.
UBS said its balance sheet as of end-2021 reflected provisions of 1.1 billion euros, or around $1.25 billion for the matter.
«We believe that the industry continues to operate in an environment in which expenses associated with litigation, regulatory and similar matters will remain elevated for the foreseeable future and we continue to be exposed to a number of significant claims and regulatory matters,» UBS said in its financial statement.
«The outcome of many of these matters, the timing of a resolution, and the potential effects of resolutions on our future business, financial results or financial condition are extremely difficult to predict,» the bank added.
