UBS Group AG's
The bank reported a fourth-quarter 2017 net loss attributable to shareholders of CHF2.22 billion, compared with a net attributable profit of CHF636 million in the year-ago period. Loss per share for the period was 60 centimes, compared with an EPS of 17 centimes a year earlier. The result included a CHF2.87 billion net deferred tax asset write-down as a result of the U.S. tax reform.
The group's pretax operating profit for the period stood at CHF997 million, up from the year-ago CHF746 million. Adjusted pretax operating profit at its wealth management division rose 25% year over year to CHF640 million from CHF511 million, while the adjusted pretax operating profit in the wealth management Americas division reached CHF385 million, up from CHF360 million in the fourth quarter of 2016.
The investment banking division booked an adjusted pretax operating profit of CHF168 million in the fourth quarter, down 51% from CHF344 million a year earlier, while the adjusted pretax operating profit at the asset management division fell 26% on a yearly basis to CHF116 million.
Fourth-quarter group net interest income dipped year over year to CHF1.67 billion from CHF1.76 billion. Net fee and commission income increased to CHF4.29 billion from CHF4.16 billion. Net trading income also rose year over year, to CHF987 million from CHF946 million a year earlier.
The group's full-year 2017 attributable profit fell to CHF1.17 billion from CHF3.20 billion. Excluding the deferred tax asset write-down, UBS said net profit would have been CHF4.03 billion, up 26% year over year.
For full-year 2017, the wealth management division posted an adjusted pretax operating profit of CHF2.76 billion, up from the year-ago CHF2.40 billion, while the amount in its wealth management Americas division came in at CHF1.37 billion, compared to CHF1.24 billion a year earlier.
The bank said it will unify the wealth management businesses to form a new global wealth management division, effective Feb. 1. Martin Blessing, head of the wealth management business, and Tom Naratil, head of UBS Americas and the wealth management Americas business, were appointed co-heads of the enlarged division, which UBS expects will enable the company to more effectively leverage the purchasing power of its CHF2.3 trillion invested asset base and realize greater synergies across technology, innovation and other areas of investment.
Additionally, UBS noted that it achieved its CHF2.1 billion annualized net cost reduction target.
As of the end of December 2017, the bank's fully applied common equity Tier 1 capital ratio stood at 13.8%, up from 13.7% at the end of September 2017 and unchanged from 2016-end. The bank's fully applied leverage ratio stood at 3.7% at the end of 2017, unchanged from the end of September 2017 and up from 3.5% at the end of 2016.
The bank's board of directors intends to propose a dividend of 65 centimes per share for full year 2017, up 8% from a year earlier. UBS will also initiate a share repurchase program of up to CHF2 billion over three years, including up to CHF550 million in 2018, commencing in March.
UBS also unveiled its 2018-2020 financial targets, under which it aims to achieve 10% to 15% of adjusted pretax profit growth per year for its newly created global wealth management business division and about 10% for the asset management division. The investment banking division, meanwhile, will continue to target an adjusted return on attributed equity of at least 15% and operate at approximately one third of the group's Basel III leverage ratio denominator and risk-weighted assets, consistent with the existing guidance.
The group also aims to operate with a fully applied CET1 capital ratio of approximately 13% and a fully applied CET 1 leverage ratio of about 3.7% between 2018 and 2020.
Adjusted figures reflect organizational changes, restatements due to the retrospective adoption of new accounting standards or changes in accounting policies, and events after the reporting period, the bank noted.
