UBS Profit Climbs, Disposes of Fund Unit
In this article (5)
UBS’ quarterly profit more than doubled on the year amid big spending cuts. The Swiss bank set out two-year targets and disclosed the sale of a funds business.
The Zurich-based bank’s fourth-quarter net profit rose to $722 million, from $315 million year-ago, amid a nearly six percent cut in spending, it said on Tuesday. It lifted its dividend to 0.73 Swiss francs per share, after paying out 0.70 francs in 2018.
We are balancing investments to take advantage of opportunities for growth across our businesses and regions while managing for efficiency,» the Swiss bank said. It recently unveiled a major restructuring of its flagship private bank, which is the centerpiece of CEO Sergio Ermotti’s 2012 new strategy for the bank.
The private bank’s newly-disclosed goal is to hike profit before taxes by at least ten percent annually. As a whole, UBS’ year was more mixed: net profit dropped nearly five percent to $4.3 billion. The wealth manager couldn’t cut annual spending quickly enough to match a tumble in revenue.
UBS is disposing of a majority of Fondcenter, a money management platform for its institutional clients, to Clearstream for $600 million, it said in a separate statement. The move will bolster UBS’ hardest type of capital, the bank said.
Questions & Answers
Q.What was UBS' net profit for the fourth quarter compared to the previous year?
What was UBS' net profit for the fourth quarter compared to the previous year?
UBS' net profit for the fourth quarter rose to $722 million. This is more than double the $315 million profit reported in the same period a year ago, primarily due to significant spending cuts.
Q.Why did UBS' overall annual net profit decrease despite the strong fourth quarter?
Why did UBS' overall annual net profit decrease despite the strong fourth quarter?
UBS' overall annual net profit dropped nearly five percent to $4.3 billion. The bank was unable to reduce its annual spending quickly enough to offset a decline in its revenue throughout the year.
Q.What is the new profit target for UBS' private bank?
What is the new profit target for UBS' private bank?
The newly disclosed goal for UBS' flagship private bank is to increase its profit before taxes by at least ten percent annually. This is a central part of CEO Sergio Ermotti’s strategy.
Q.Which business unit is UBS selling, and to whom?
Which business unit is UBS selling, and to whom?
UBS is selling a majority stake in Fondcenter, its money management platform for institutional clients. Clearstream is acquiring this stake for a price of $600 million.
Reader pulse
UBS's strategy: growth or efficiency?
18,942 votes so far