UBS earnings Q4 and FY 2022

UBS beat market expectations with its latest results on the back of lower expenses and higher interest rates.

The bank reported $1[ads1].7 billion in net income for the fourth quarter last year, bringing its total annual profit to $7.6 billion in 2022.

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Analysts expected UBS to post net income of $1.3 billion in the fourth quarter and $7.3 billion for the year, according to Refinitiv data.

The Swiss lender said first quarter 2023 earnings are set to be positively impacted by higher customer activity, higher interest rates and easing of Covid-19 rules in Asia.

“We delivered strong full-year results and solid fourth-quarter results in a difficult macroeconomic and geopolitical environment,” CEO Ralph Hamers said in a statement.

Here are a few highlights from the latest release:

• CET 1 capital adequacy, a measure of banks’ soundness, was 14.2%, down from 14.4% in the previous quarter;
• Revenue fell to $8.029 billion from $8.705 billion a year ago;
• Return on tangible equity, a measure of the bank’s performance, rose to 13.2% at the end of the quarter, up from 10% a year ago.

Among the bank’s units, Global Wealth Management had a fourth-quarter net interest income increase of 35% year-on-year, given higher deposit margins on the back of higher interest rates. Personal and corporate banking also recorded a 21% year-on-year increase in net interest income in the same period, as a result of higher interest and loan income.

But market uncertainty hit the investment banking and asset management branches of the business. The former saw an annual drop in revenue of 24%, while income from asset management fell by 31% year-on-year due to “negative market performance and currency effects”.

UBS also said it will buy more shares in 2023.

“We remain committed to a progressive dividend and expect to buy back more than $5 billion in shares in 2023,” Hamers said.

UBS shares have risen by around 15% over the past 12 months.