Swiss bank UBS said it delivered a stronger-than-expected fourth-quarter performance, driven by robust results in wealth management and investment banking, and announced further share repurchases as it continues post-acquisition integration work.
Net profit for the quarter rose 56% to $1.2 billion, surpassing a company-provided consensus forecast of $919 million. In a separate capital return move, the bank confirmed it intends to buy back at least $3 billion of its shares in 2026, matching the amount repurchased in the prior year, and stated a desire "to do more." The scale of any additional repurchases will depend on greater clarity about the future regulatory regime for banking in Switzerland.
Swiss regulators have proposed tougher capital requirements for the country’s remaining big bank after the firm acquired the ailing Credit Suisse in 2023 in a state-backed emergency takeover. How those final rules will be framed is still uncertain. UBS noted that its stock has traded higher since early December after lawmakers floated a potential compromise and reports suggested the government might ease some elements of the proposed rules.
Management also restored a previously shelved capital return objective, reviving an ambition to reach a reported return on Common Equity Tier 1 - CET1 - capital of around 18% by 2028. The bank simultaneously sharpened its efficiency goal, targeting a group cost-income ratio of roughly 67% by 2028, an improvement on its current stated target of below 70%.
On integration progress, UBS said approximately 85% of Swiss-booked accounts have already been migrated onto UBS systems. The bank raised its cost-savings programme by $500 million, bringing the total targeted savings to $13.5 billion. CEO Sergio Ermotti was quoted saying, "I am confident in our ability to capture the remaining synergies by the end of the year."
Ermotti, who managed the bank’s emergency takeover of Credit Suisse in 2023, is reported by two sources with knowledge of the matter to be scheduled to step down by the middle of 2027, although the precise timeline has not been finalised. Several internal executives have been mentioned as possible successors, while few external names have been put forward to date.
UBS’s global wealth management division added $8.5 billion in net new assets during the quarter. The bank reported strong inflows from Asia, Europe and the Middle East but experienced outflows in the United States, attributing U.S. weakness in part to the loss of relationship managers.
Looking ahead, UBS expects global wealth management’s net interest income to decline by a low single-digit percentage in the first quarter of 2026. The bank said its outlook is based on assumptions of steady global growth and easing inflation, and it characterised capital markets activity and its deal pipeline as healthy.
Summary
UBS posted a significant quarter-on-quarter profit increase and announced at least $3 billion in buybacks for 2026 while reinstating ambitious capital return and efficiency targets. Integration of acquired accounts is advanced, cost-saving targets were raised, and asset inflows were regionally mixed with U.S. outflows. Future buybacks and targets remain contingent on the shape of forthcoming Swiss banking regulations.
Key points
- UBS reported Q4 net profit of $1.2 billion, a 56% increase that exceeded the company-consensus forecast of $919 million - impacts banking and financial services sectors.
- The bank plans at least $3 billion in share repurchases for 2026, matching 2025 buybacks, but any additional repurchases depend on regulatory clarity - relevant to equity markets and investor returns.
- UBS reinstated a CET1 return target of around 18% by 2028 and tightened its cost-income ratio goal to about 67% by 2028, reflecting management focus on capital efficiency and profitability - affects bank capital planning and investor expectations.
Risks and uncertainties
- Regulatory uncertainty in Switzerland - proposed stricter capital rules could influence the scale and timing of additional buybacks and capital targets, affecting banking sector capital allocations.
- Integration and execution risk - while 85% of Swiss-booked accounts have migrated, capturing remaining synergies depends on successful completion of integration work by year-end, with implications for operating costs and results.
- Regional client dynamics - inflows from Asia, Europe and the Middle East were offset by U.S. outflows tied to lost relationship managers, introducing uncertainty to future asset growth and net interest income in wealth management.