UBS's 4Q Underlying Pretax Profit: A Strong Performance Driven by Strategic Initiatives

UBS Group AG, the Swiss banking giant, reported a robust underlying pretax profit of $1.8 billion in the fourth quarter of 2024, marking a significant 198% year-over-year (YoY) increase. This strong performance can be attributed to several strategic initiatives and cost-saving measures implemented by the bank, including the integration of Credit Suisse and the decommissioning of legacy applications. UBS's net profit for the quarter stood at $0.8 billion, while the full-year net profit reached $5.1 billion.



UBS's underlying return on common equity tier 1 (RoCET1) for the year was 8.7%, and it maintained a strong capital position with a CET1 capital ratio of 14.3% and a CET1 leverage ratio of 4.7%. This solid capital buffer has enabled UBS to self-fund its growth initiatives, return capital to shareholders, manage risks, and successfully integrate its operations.

The bank's franchise strength and client momentum have been key drivers of its financial performance. UBS's Global Wealth Management (GWM) and Asset Management divisions have driven significant client momentum, with net new assets of $18 billion in GWM for the quarter and $97 billion for the full year (FY24). Asset Management also saw net new money of $33 billion in 4Q24 and $45 billion in FY24. This growth in client assets has contributed to the overall increase in underlying pretax profit.

High client activity and transaction-based income have also played a significant role in UBS's strong performance. The bank experienced high client activity in the fourth quarter, with underlying transaction-based income up double digits YoY in both GWM and Personal & Corporate Banking (P&C). This increase in transaction-based income further boosted the underlying pretax profit.

UBS's Investment Bank also performed well, with underlying revenues growing by 37% YoY, driven by strong growth in Global Banking and Global Markets. This led to market share gains in areas of strategic investments, contributing to the overall increase in underlying pretax profit.

The integration of Credit Suisse has been a significant strategic initiative for UBS, contributing to its financial performance. In 2024, UBS achieved all key integration milestones, reducing the execution risk of the acquisition and consolidating key operating entities. The successful migration of wealth management client accounts across APAC and Europe in the fourth quarter further demonstrates the progress made in the integration process.

UBS has also made significant progress in decommissioning legacy applications from the Credit Suisse acquisition, which is expected to unlock substantial cost reductions. This initiative is part of the bank's cost-reduction ambitions and has contributed to the USD 7.5 billion saved compared to the 2022 baseline. In 2024, UBS realized an additional USD 0.7 billion in gross cost savings in the fourth quarter, bringing the total for the year to USD 3.4 billion. This represents almost 60% of the planned cost saves.

UBS's strong financial results in 2024, including a net profit of USD 0.8 billion in the fourth quarter and USD 5.1 billion for the full year, demonstrate the bank's ability to execute on its strategic initiatives and cost-saving measures. The bank's underlying return on common equity tier 1 (RoCET1) for the year was 8.7%, and it maintained a strong capital position with a CET1 capital ratio of 14.3% and a CET1 leverage ratio of 4.7%. This solid capital buffer has enabled UBS to self-fund its growth initiatives, return capital to shareholders, manage risks, and successfully integrate its operations.