UBS Group's Q4 Earnings Rise Y/Y On Lower Expenses

UBS Group AG (UBS - Free Report) reported fourth-quarter and 2019 net profit attributable to shareholders of $722 million compared with $315 million in the prior-year quarter.

The company’s performance was supported by higher net interest income (up 3% year over year) along with rise in net fee and commission income (up 3%). Further, decline in expenses was a tailwind.

For full-year 2019, the company reported net profit attributable to shareholders of $4.3 billion, down 4.7% year over year.

The company recorded higher profitability in Asset Management, Global wealth management, Personal & Corporate Banking and Investment Bank units on an adjusted basis. However, performance of Corporate Center unit was disappointing.

Operating Income Climbs, Expenses Fall

UBS Group’s adjusted operating income increased 4.4% to $7.08 billion from the prior-year quarter.

Adjusted operating expenses fell 6.9% to $5.87 billion in the fourth quarter. Expenses included provisions for litigation, regulatory and similar matters of $104 million.

Business Division Performance

Global wealth management’s adjusted operating profit before tax came in at $787 million, up significantly year over year. Higher transaction-based income along with lower expenses supported results. Net new money outflows were $4.7 billion.

Asset Management’s adjusted operating profit surged 48% year over year to $187 million, supported by rise in net management and performance fees. Also, invested assets rose to $903 billion.

Personal & Corporate banking’s adjusted operating profit before tax was up 2% year over year to $309 million. Higher transaction-based income and recurring net fee income was partially offset by lower interest income. Annualized net new business volume growth for personal banking was strong at 2.8%.

Investment Bank unit’s adjusted operating profit before tax came in at $198 million against loss of $5 million in the prior-year quarter. Rise in Equities and FX, Rates & Credit revenues aided bottom-line growth. Decline in expenses was another tailwind.

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