Switzerland’s largest bank by assets attracted new customer money in the quarter, while a rival was weakened
Group AG said wealth clients added new assets at the bank in the fourth quarter, helping it post a better-than-expected net profit.
Chief Executive Ralph Hamers said it was among banks benefiting from outflows at rival Credit Suisse Group AG, including in Asia. He said Credit Suisse’s woes weren’t the main driver of inflows.
The Swiss bank made a $1.65 billion quarterly net profit, more than the $1.28 billion analysts expected and up from $1.35 billion a year earlier. Inflows from its wealth customers picked up in the quarter across most regions, lifting the annualized growth above the bank’s 5% target, to 7.9%. It stuck to financial targets and said it would aim to buy back more than $5 billion in stock this year. UBS bought back $5.6 billion in stock in 2022.
UBS combines a large wealth-management arm with a smaller investment bank and is one of Europe’s strongest lenders in terms of its stock valuation and capital position. Credit Suisse previously said customers removed around $88 billion last fall following concerns about its financial health. Mr. Hamers said most Asian wealth clients already have business with UBS, which he said limited potential inflows from Credit Suisse, and that other banks were more aggressive in taking on its clients’ riskier lending.
Total invested assets in UBS’s global wealth management business rose to $2.82 trillion, from $2.66 trillion in the third quarter. It said customers placed $23 billion in net new money or investments producing fees in the three months to Dec. 31, of $60 billion in net new fee-generating assets it attracted in all of 2022. In 2021, while markets were still rallying from low interest rates, net new fee-generating asset inflows were $107 billion.
Mr. Hamers said clients have responded to global interest rate rises by shifting money into higher-yielding savings and deposits and are sitting out market volatility for other investments. He said China’s opening up was a positive signal but inflation is still high and the bank is generally cautious in its outlook.
The gains in wealth management helped offset poor performance in UBS’s investment bank, where operating profit plunged 84% to $112 million, because of a lack of fees from corporate deal advice and lower revenue in most market trading businesses.
UBS shares fell 3% Tuesday, but are up 10% so far this year. UBS has benefited along with other banks from the rise in interest rates, which has helped increase the difference between the interest they charge on loans versus what they pay depositors.