The common equity tier 1 (CET1) capital ratio, a key gauge of financial strength, stood at 14.4 % at the end of the quarter. The level compares with 14.8 % in the third quarter and remains above regulatory minimum requirements under the Basel III framework. The decline mainly reflects additional risk-weighted assets tied to the ongoing integration of Credit Suisse’s operations.
Fourth-quarter profit of $1.2 billion was down from the $2.5 billion reported in the preceding quarter, when results benefited from one-time gains related to the acquisition. Nonetheless, the figure outpaced market expectations and indicated steady underlying performance amid the complex merger process.
Group operating expenses reached $10.3 billion, compared with $9.1 billion in the prior three-month period. UBS attributed the increase to restructuring costs and investments associated with combining systems, personnel and client platforms inherited from Credit Suisse.
Ermotti stated that the bank has made significant progress toward completing what he termed one of the most complex integrations in modern banking. He reiterated that the legal merger of Credit Suisse AG into UBS AG remains on track for completion later in 2024, subject to customary approvals.
The chief executive, who returned to UBS last year to steer the takeover, is expected to step down in April 2025 after the absorption of Credit Suisse is finalized. A succession process is under way, and the board has indicated that an announcement will be made once the integration reaches its final phase.
By business line, Global Wealth Management continued to generate the largest share of earnings, supported by net new fee-generating assets from former Credit Suisse clients. The Investment Bank recorded solid trading revenues but faced a slowdown in capital markets activity toward the end of the quarter. Personal and Corporate Banking in Switzerland reported stable net interest income, while Asset Management saw modest outflows in a mixed market environment.
For the full year, UBS reported net profit of $29.4 billion, a figure that includes negative goodwill recognized on the purchase of Credit Suisse. Excluding that extraordinary item, underlying profit was lower, reflecting the cost of restructuring and the impact of higher funding expenses.
Looking ahead, UBS said its 2024 priorities include completing the operational migration of Credit Suisse clients, reducing duplicative functions, and realizing targeted cost synergies. Management reaffirmed previously announced goals of achieving more than $10 billion in annual cost savings by end-2026.
The bank also noted ongoing macroeconomic headwinds, including elevated interest rates in key markets and geopolitical uncertainty that could affect client sentiment. Despite these factors, UBS believes the diversified nature of its revenue streams positions it to navigate potential volatility.
Analysts will focus on UBS’s ability to maintain capital ratios while executing the buyback and absorbing integration costs. The bank emphasized that any capital return remains subject to prevailing conditions and regulatory feedback.
UBS shares have traded higher in early market reaction following the earnings release, reflecting investor optimism regarding the pace of integration and the planned share repurchase. The stock’s performance continues to be influenced by updates on cost savings, asset retention, and regulatory developments tied to the merger.
UBS acquired Credit Suisse in March 2023 after Swiss authorities arranged an emergency deal aimed at stabilizing the country’s financial system. The transaction combined the nation’s two largest banks, creating an institution with more than $5 trillion in assets under management and a substantial global footprint in wealth management, investment banking and asset management.
Crédito da imagem: Fabrice Coffrini | AFP | Getty Images
