Shares of UBS Group AG were gaining around 3 percent in Swiss trading after the banking major reported Tuesday significantly higher profit in its fourth quarter, driven by improved performance in all divisions, mainly asset management and Investment Bank.
Further, the company announced a dividend, as well as plans to repurchase up to $1.1 billion of shares in the first quarter. Looking ahead, the company expects revenues in the first quarter of 2021 to be positively influenced by seasonal factors such as higher client activity, compared with the fourth quarter of 2020.
Regarding its dividend, UBS said it intends to propose a 2020 ordinary dividend of $0.37 per share. Subject to approval by shareholders at the Annual General Meeting scheduled for April 8, the dividend will be paid on April 15 to shareholders of record on April 14.
Further, in the first quarter of 2021, the company plans to repurchase the remaining 100 million Swiss francs of the existing three-year share repurchase program, while launching a new three-year program of up to 4 billion francs, of which up to $ 1 billion is to be executed in the first quarter of 2021.
UBS stated that investor sentiment improved in the fourth quarter, largely on the basis of the strong rebound in economic activity seen through the third quarter, combined with greater optimism regarding the availability and effective distribution of COVID-19 vaccines, among others.
For the fourth quarter, net profit attributable to shareholders was $1.71 billion, up 137 percent from last year’s $722 million. Earnings per share were $0.46, up from $0.19 last year.
Profit before tax was $2.06 billion, up 122 percent from $928 million a year ago. Operating income grew 15 percent to $8.12 billion from last year’s $7.05 billion.
Global Wealth Management profit before tax climbed 22 percent with growth in all regions. Personal & Corporate Banking pre-tax profit grew 4 percent, while asset management profit before tax surged 123 percent.
Investment Bank profit before tax was $529 million, compared to a loss last year as nearly all businesses delivered a double-digit increase in revenues.
Net interest income climbed 29 percent to $1.62 billion from $1.26 billion last year. Fee and commission income grew 14 percent from last year to $5.54 billion.
In the fourth quarter, credit loss expenses were at lower levels than those seen in prior quarters of 2020.
Separately, UBS announced that its Board of Directors will nominate Claudia Böckstiegel and Patrick Firmenich for election to the Board at the Annual General Meeting on April 8.
Böckstiegel has been General Counsel and member of the Enlarged Executive Committee of Roche Holding AG since 2020. Firmenich has been the Chairman of the Board of Firmenich International SA since 2016.
In Switzerland, UBS shares were trading at 13.18 francs, up 2.01 percent.
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