UBS Accelerates Share Buyback as Q4 Income Jumps 137%

The Swiss bank is aiming to repurchase $1.1 billion in shares in Q1 of 2021.

UBS published its earnings report on Tuesday showing a net income of $1.71 billion for the fourth quarter of 2020, 137 percent higher than the same quarter in the previous year.

The Swiss wealth manager ended the year with a net income of $6.6 billion, jumping 54 percent year-on-year. The reported earnings dwarfed the market expectations from the Swiss bank as analysts were predicting the last quarter’s earning to be around $967 million.

The latest numbers were the continuation of the bank’s performance as it earlier reported $2.1 billion in net earnings for the third quarter of 2020.

Global wealth management and asset management divisions performed exceptionally in the quarter with a jump of pre-tax profits by 22 percent and 123 percent year-over-year, respectively. Also, the investment banking division achieved a 20 percent return on attributed equity.

UBS further proposed a dividend distribution of $0.37 per share for last year.

This is the first published results of the Swiss bank under the leadership of Ralph Hamers who took over as the Chief Executive on November 1.

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“Our strong 2020 results clearly demonstrate the true strength of our franchise and the commitment of our employees,” Hamers said in a statement. “We stood for stability, maintained connectivity, and provided the advice and solutions our clients needed.”

Additionally, he pointed out the growing business of the Swiss giant in the Americas and Asia-Pacific.

Accelerating Share Buyback

Moreover, UBS accelerated its share buyback program and announced a three-year program to purchase up to $4.5 billion worth of its shares. It repurchased $0.4 billion in shares last quarter and is aiming to purchase another $1.1 billion in the ongoing quarter. The bank reserved $2 billion of its capital for future buybacks.

Meanwhile, the Swiss bank remained concerned with the economic and political situations in some large economies and geopolitical tensions, which could hamper the recovery of economic conditions.

“We expect our 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,” UBS stated.

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