UBS Posts Strong Q4 Results, Launches $1 Billion Share Buyback

UBS Group AG, the Swiss banking giant, has reported a net profit of $770 million for the fourth quarter of 2024, trouncing analysts' estimates and marking a significant improvement from the year-earlier period. The bank's strong performance was driven by robust client momentum, increased transaction activity, and successful integration progress. In addition to its impressive financial results, UBS announced a new share repurchase program, with plans to buy back up to $2 billion of its shares over the next two years.



UBS's net profit of $770 million in the fourth quarter of 2024 is a notable achievement, considering the bank's recent integration of Credit Suisse and the challenges faced by the industry as a whole. The bank's strong performance can be attributed to several factors:

1. Robust client momentum: UBS attracted $18 billion in net new assets in Global Wealth Management during the quarter, demonstrating the bank's ability to attract and retain clients. This impressive figure, while missing the $21 billion forecast by Zuercher Kantonalbank analysts, still highlights the bank's strong client base.
2. Increased transaction activity: UBS experienced strong transactional activity across both private and institutional clients. In Global Wealth Management, underlying transaction-based income increased by 12% year-over-year, with strong momentum across all regions, led by the Americas and APAC. In the Investment Bank, Global Markets delivered revenues of $1.9 billion, up 44% year-over-year, mainly driven by higher client activity in equities and FX.
3. Cost reduction and integration progress: UBS achieved all key integration milestones in 2024 and significantly reduced execution risk. The bank successfully migrated wealth management client accounts across booking centers in Hong Kong, Singapore, and Zurich. Additionally, UBS reduced non-core and legacy risk-weighted assets (RWAs) by $16 billion, mainly from active unwinds, and underlying operating expenses declined by 26% quarter-over-quarter.



UBS's strong financial performance is reflected in its share price, which has risen by more than 80% since the bank's acquisition of Credit Suisse. The bank's share buyback program, which is subject to the absence of material and immediate changes to the current capital regime in Switzerland, is expected to further enhance shareholder value. UBS plans to repurchase $1 billion of shares in the first half of 2025 and up to $2 billion in the second half while maintaining its target common equity tier 1 capital (CET1) ratio of around 14%.

The share repurchase program is expected to have a positive impact on UBS's capital adequacy ratios, potentially enhancing the bank's financial strength and stability. By repurchasing shares, UBS is effectively returning capital to shareholders, which can increase the value of remaining shares and potentially boost the company's stock price. Additionally, the share repurchase program can signal to the market that UBS's management believes the current share price is undervalued, potentially leading to an increase in the share price.

In conclusion, UBS's strong fourth-quarter results and planned share buyback program demonstrate the bank's commitment to enhancing shareholder value while maintaining a strong capital position. The bank's robust client momentum, increased transaction activity, and successful integration progress have contributed to its impressive financial performance, and the share repurchase program is expected to further boost shareholder value. As UBS continues to execute on its strategic objectives, investors can expect the bank to remain a strong performer in the global financial landscape.