ZURICH, SWITZERLAND – Swiss banking giant UBS on Tuesday reported better-than-expected fourth quarter earnings, with its net profit surging by nearly a quarter, even as its investment bank revenues took a hit.
Net profits at Switzerland’s largest bank soared 23 percent to nearly US$1.7 billion in the final quarter of 2022, while its revenues came in at just above $8 billion, marking an 8-percent drop year on year.
Analysts polled by the AWP financial news agency had expected to see UBS rake in $1.28 billion in net profit on revenues of $7.92 billion.
For the full year 2022, UBS meanwhile saw its net profit inch up to $7.6 billion from $7.5 billion a year earlier.
“We delivered good full-year and solid fourth-quarter results in a difficult macroeconomic and geopolitical environment,” company chief Ralph Hamers said in a statement.
UBS has also likely benefited from what is believed to be a significant exodus of clients from its scandal-plagued Swiss rival, Credit Suisse.
“Our performance proves that our strategy is the right one. Clients turned to us for advice and stability,” Hamers said, pointing out that UBS pulled in $60 billion of new fee-generating assets in 2022.
All was not rosy however.
The bank warned that the combined impact in 2022 of “persistent inflation, rapid central bank tightening, the Russia–Ukraine war, and other geopolitical tensions,” had hit asset pricing levels and investor sentiment.
As revenues generated by global markets dwindled, UBS’s investment bank saw revenues shrink 24 percent in the fourth quarter.
And its asset management revenues dropped by 31 percent due to decreasing net management fees, amid negative market performance and foreign currency effects, it said.
Its global wealth management division – the historic heart of its business – meanwhile saw revenues slip five percent in the final quarter of the year.
UBS is reporting its numbers after several large US investment banks like Goldman Sachs and Morgan Stanley reported deep losses earlier this month, as severe market volatility following the start of the Ukraine war has left companies less inclined to enter into mergers or take businesses public.