UBS Reports Fourth-Quarter Profit of $800 Million, Full-Year Earnings at $5.1 Billion

UBS Group AG, the Swiss banking giant, has reported a net profit of $800 million for the fourth quarter of 2024, with full-year earnings reaching $5.1 billion. The strong financial performance was driven by robust growth in Global Wealth Management (GWM) and Asset Management (AM), as well as market share gains in the Investment Bank. The bank's strategic integration of Credit Suisse has also contributed to its success, with significant cost savings and risk reductions achieved.

Growth in Global Wealth Management and Asset Management

UBS's GWM and AM segments have been key drivers of the bank's earnings growth. In the fourth quarter, GWM attracted $18 billion in net new assets, bringing the full-year total to $97 billion. Asset Management net new money inflows reached $33 billion in Q4 2024 and $45 billion for the full year. The bank's total invested assets grew by 7% year-over-year to $6.1 trillion.

The Americas and APAC regions stood out as key growth drivers for UBS. In Switzerland, the bank granted or renewed over CHF 70 billion in loans to households and businesses in 2024, reaffirming its commitment to its home market.

Investment Banking Gains

UBS's Investment Bank benefited from increased client activity in equities and foreign exchange, posting gains across all regions. Revenues in Global Banking rose 19% year-over-year on an underlying basis, supported by strong performance in Advisory and Leveraged Capital Markets in Asia and the U.S. The bank's strong performance in Global Banking and Global Markets contributed to market share gains in areas of strategic investments.

Integration Progress and Cost Savings

The integration of Credit Suisse remains on track, with all key 2024 milestones achieved. UBS has significantly reduced the execution risk of the acquisition by consolidating key operating entities and successfully migrating wealth management client accounts across APAC and Europe in the fourth quarter. The bank is continuing to decommission legacy applications and has made significant progress in reducing costs.

UBS achieved additional gross cost savings of $0.7 billion in Q4 2024, bringing the total cost reductions to $3.4 billion for the full year. Compared to its 2022 cost base, UBS has already secured $7.5 billion in savings, covering nearly 60% of its planned reductions. The bank has also reduced risk-weighted assets (RWA) in the Non-Core and Legacy division by $3 billion in the fourth quarter, bringing the total reduction to $33 billion for the full year.

Capital Position and Shareholder Returns

UBS has maintained a strong capital position, finishing the year with a 14.3% CET1 capital ratio and a 4.7% CET1 leverage ratio. This solid capital buffer has allowed UBS to self-fund growth and return capital to shareholders. The bank completed $1 billion in share buybacks and proposed a dividend payout of $0.90 per share, an increase of 29% year-over-year. UBS plans to continue attractive capital returns in 2025, with around 10% growth in dividend per share and plans to repurchase up to an additional $2 billion in shares.

UBS's strong earnings growth in GWM and AM, driven by net new assets and client momentum, is likely to continue, given the continued demand for asset management services and the bank's expansion in key markets. The successful integration of Credit Suisse has also set the stage for long-term growth and higher returns, with UBS targeting an underlying RoCET1 of ~15% and an underlying cost/income ratio of <70% by the 2026 exit rate. The bank is well-positioned to maintain its competitive edge in the market, with a strong capital position and a focus on cost discipline.