UBS’ fourth-quarter profit beat market expectations, but the Swiss banking giant reported a fall in revenues on the back of weaker client activity and warned of an “uncertain” year ahead.
The bank reported $1.7 billion of net income for the fourth quarter of last year, bringing its full-year profit to $7.6 billion in 2022. Analysts had expected UBS to post net income of $1.3 billion in the fourth quarter and of $7.3 billion for the year, according to Refinitiv data.
The bank’s Global Wealth Management unit posted a fourth-quarter increase in net interest income of 35% on the year, given higher deposit margins off the back of higher interest rates. Its Personal and Corporate Banking division also recorded a 21% year-on-year hike in net interest income over the same period, as a result of higher interest rates and loan revenues.
But market uncertainty hit the investment banking and asset management arms of the business. The former saw a 24% yearly drop in revenues, whereas asset management revenues fell by 31% year-on-year due to the “negative market performance and foreign currency effects.”
“The rate environment is helping the business on one side, and that offsets some of the lower activity that we see on the investment side,” CEO Ralph Hamers told CNBC’s Geoff Cutmore on Tuesday.
