Given the acquisition and ongoing integration of Credit Suisse, the numbers from UBS are a little messy, however, Q4 results overnight were ahead of expectations, though, there was a key variable with some uncertainty around regulatory capital requirements, which saw the stock trade down ~7%. That was the key focus on the call overnight, which overshadowed a very solid result.
- Q4 revenue $11.64 billion, up +7.2% y/y and ahead of $11.43 billion expected
- Net Income of $770 million vs estimate $485.7 million
- Operating expenses are a focus with any integration and were lower than expected at $10.36 billion (vs $10.56b exp)
- They announced a significant $3 billion share buyback.
UBS management discussed the prospect of a substantial increase in capital requirements which would require the group to retain more of its profit, which would generally mean less money for shareholders. We don’t know what the outcome will be here, nor do UBS, and that creates a cloud in the short term.
- A good result and strong buy back, overshadowed with uncertainty around regulatory capital requirements.
MM see’s UBS as a buy into weakness – we remain long & bullish
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