UBS Group AG recorded a marked improvement in profitability for the final quarter of the year, reporting a 56% year-on-year rise in net profit attributable to shareholders to $1.19 billion for the three months ended December 31.
The bank said its underlying profit before tax climbed 62% to $2.87 billion in the quarter. Underlying revenues increased 10% to $12.19 billion, with the uplift supported by higher wealth management fee income, stronger transaction income and contributions from its investment bank and global market divisions.
In conjunction with the results, UBS announced a $3 billion share buyback planned for 2026 and stated that it intended to "do more." The board also approved a dividend of $1.10 per share, a 22% increase from the prior year.
On expectations for the coming quarter, UBS said it foresees a low single-digit percentage decline in net interest income (NII) from its global wealth management unit as it moves into the first quarter of 2026. NII from the bank's core banking activities is expected to remain broadly stable over the same period.
UBS reported a CET1 capital ratio of 14.4% as of the end of December. Operating expenses in the quarter fell 1% year-on-year, totaling $10.29 billion.
Key takeaways
- Net profit attributable rose 56% year-on-year to $1.19 billion for Q4.
- Underlying profit before tax increased 62% to $2.87 billion; underlying revenues were $12.19 billion, up 10%.
- UBS announced a $3 billion 2026 share buyback, said it intends to "do more," and raised its dividend to $1.10 per share, a 22% increase.
Sectors affected
- Retail and private banking - through changes in wealth management net interest income and fee income.
- Investment banking and capital markets - as contributions from these units supported revenues.
- Equity markets - in light of the announced buyback and dividend increase.
Risks and uncertainties
- Net interest income exposure - UBS expects a low single-digit percentage decline in NII from global wealth management in Q1 2026, which could weigh on revenue if that trend persists.
- Reliance on fee and transaction income - the quarter's revenue gains were aided by wealth management fees and transaction income, making revenues sensitive to changes in client activity levels.
- Future capital return execution - while the bank has committed to a $3 billion buyback and said it intends to "do more," the timing and scale of any additional returns remain contingent on future decisions.
The results show UBS returning to stronger profitability, supported by core businesses and modest cost reductions. The bank's capital ratio remained robust at 14.4% at the end of December, and operating costs edged down slightly compared with the prior year. Management's outlook for NII in wealth management introduces a point of caution for the start of 2026, while the announced buyback and increased dividend point to a willingness to return capital to shareholders.