UBS has posted a net loss of CHF2.22bn for the fourth quarter of 2017, as against a net profit of CHF636m in the comparable period a year ago.
The result includes a CHF2.87bn net write-down related to tax law overhaul in the US. Excluding the write-down, net profit stood at CHF641m.
Compared to the previous year, the group’s adjusted pre-tax profit surged 22% to CHF1.22bn and reported pre-tax profit soared 33% to CHF997m.
The group’s total operating income rose 1% to CHF7.12bn from CHF7.05bn a year ago, while total operating expenses dipped 3% year-on-year to CHF6.12bn.
The group’s Wealth Management arm reported an adjusted profit before tax of CHF640m for the fourth quarter of 2017, an increase of 25% compared to CHF511m a year ago. The unit attracted net new money of CHF14.2 bn.
The global wealth management business of the group reported adjusted profit before tax of CHF1.02bn, an increase of 18% year-on-year. Net new money for the quarter was CHF13.8bn.
Wealth Management Americas posted adjusted profit before tax of $390m, up 9% from $358m in the fourth quarter of 2016. Net new money outflows were $0.5bn.
UBS group CEO Sergio Ermotti said: “2017 was an excellent year for us. We delivered stronger financial results and met our net cost reduction target. Greater regulatory clarity means we can open a new chapter for UBS, allowing us to sharpen our focus on growth across our businesses, make further investments in technology and deliver attractive returns to shareholders.”
In addition, the bank also revealed plans to create a unified wealth management division, dubbed Global Wealth Management (GWM), by merging its American wealth management and international wealth management businesses.
The new unit is expected to be operational from 1 February 2018 and will be reported in the group’s first quarter results.
It will be jointly led by Martin Blessing and Tom Naratil as co-presidents. Blessing currently serves as the president of wealth management at UBS, while Naratil serves as the president of UBS Americas and Wealth Management Americas.
“In the last few years, we transformed our wealth management businesses, adapting to a new paradigm while adding CHF 1.0bn in adjusted profits since 2011. Two years ago, we began to more closely align the divisions, and today’s announcement reflects our continued evolution. It will mean improved efficiency, more sharing of best practices, greater returns on our investments and enhanced client service,” Ermotti noted.
UBS also plans to raise its dividend for investors to CHF0.65 per share, a rise of 8% compared to the previous year, as well as launch a share buyback programme of nearly CHF2bn over the next three years.