By Ariane Luthi
ZURICH, Feb 4 (Reuters) – Swiss bank UBS posted on Wednesday a forecast-beating 56% surge in net profit on strong performances from its wealth management and investment banking divisions, and announced plans for more share buybacks.
The world’s largest wealth manager intends to repurchase at least $3 billion of shares in 2026, the same amount it bought back last year, adding that it aims “to do more.”
Additional buybacks would be subject to further clarity around the future regulatory regime for banking in Switzerland, it said.
Swiss authorities have proposed stricter capital rules for the country’s remaining big bank after it bought ailing Credit Suisse in 2023 in a state-engineered emergency takeover.
How the final regulations will be shaped remains unclear, but shares in UBS have climbed by roughly a fifth in value since early December after lawmakers floated a compromise and Reuters reported government preparations to water down some of the rules.
There were few surprises in the earnings release, and UBS shares were down 1.6% in early trade compared with a 0.2% rise for the wider European banking index.
AN OLD TARGET REVIVED
UBS revived its ambition to achieve a reported return on Common Equity Tier 1 (CET1) capital of around 18% by 2028, an item it had dropped after the Swiss government pitched new capital rules in June.
Additionally, it is aiming for a group cost-income ratio of around 67% by 2028, a more ambitious target than its current one of below 70%.
Net profit came in at $1.2 billion for the fourth quarter, ahead of a company-provided consensus forecast of $919 million. Underlying total revenue climbed 10% to $12.2 billion.
“What UBS can control… continues to perform very well,” Vontobel analysts said in a note to clients.
The bank said it had made “excellent integration progress”, adding that around 85% of Swiss-booked accounts have been migrated onto UBS systems.
“I am confident in our ability to capture the remaining synergies by the end of the year,” CEO Sergio Ermotti said in a statement, adding the bank had increased its cost-saving program by $500 million to $13.5 billion.
Ermotti, who oversaw the Swiss bank’s 2023 emergency takeover of Credit Suisse, is set to step down by the middle of 2027 although the timeline is not finalised, two sources with knowledge of the matter have said.
Several internal candidates have been floated as potential successors, while few names for potential external ones have surfaced so far.
UBS added $8.5 billion in net new assets to its global wealth management division during the quarter.
While it saw strong inflows from Asia, Europe and the Middle East, the bank had outflows in the U.S., where it has lost relationship managers.
UBS said it expects a low single-digit percentage decline in global wealth management’s net interest income in the first quarter of 2026.
For the year ahead, the bank sees steady global growth and easing inflation, while capital markets activity and the pipeline for deals are expected to remain healthy.
(Reporting by Ariane Luthi; Editing by Emelia Sithole-Matarise and Edwina Gibbs)
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