UBS reports a 137% jump in profit, but has concerns over economic recovery

LONDON — UBS, the world’s largest wealth manager, has reported net income of $1.71 billion for the fourth quarter of 2020, a 137% jump on the year before.

Analysts had expected income to come in at $967 million for the three-month period, according to Refinitiv. It comes after the Swiss bank reported net income of $2.1 billion for the third quarter of last year.

Double-digit profit growth in UBS’ wealth management and asset management division contributed to the quarterly performance.

However, despite beating analyst expectations with its results, UBS was cautious on the economic outlook.

“Recent developments, including economic and political situations in some large economies and geopolitical tensions, have again raised questions around the shape and pace of the recovery,” the bank said in its result statement.

“The growing numbers of COVID-19 infections and hospitalizations as well as lockdowns and similar measures imposed to control the pandemic add to existing concerns about the shape of the overall recovery and the severity and duration of the effects of the pandemic in certain economic sectors.”

Here are some other key metrics from the results:

• Operating income came in at $8.1 billion, versus $8.9 billion at the end of the third quarter.
• Common equity tier 1 capital ratio (CET1) — a metric of bank solvency — was 13.8% versus 13.5% in the previous quarter.
• Return on tangible equity — a metric of profitability — hit 12.9%, compared with 16.2% in the previous quarter.

The latest results are the first under the leadership of Ralph Hamers, who took over as the new chief executive officer on Nov. 1.

UBS shares are up around 3% since the start of the year.

This is a breaking news story and it is being updated.