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(Sharecast News) - UBS reported a sharp rise in fourth-quarter and full-year profits on Wednesday, underpinned by strong client activity, trading revenues and deepening cost savings from its takeover of Credit Suisse, while announcing higher shareholder returns and reaffirming its medium-term targets.
The Swiss lender posted a net profit of $1.2bn for the fourth quarter of 2025, up 56% year on year and well ahead of analyst expectations, taking full-year net profit to $7.8bn, a 53% increase.
Group revenues totalled $12.1bn in the final quarter, broadly in line with forecasts, while return on CET1 capital stood at 6.6% for the quarter and 10.8% for the year.
Client activity remained robust across core businesses, with wealth management revenues rising 9% year on year in the fourth quarter and the investment bank delivering a 17% increase in global markets revenues, driven by strong foreign exchange and equities trading.
Group invested assets exceeded $7trn for the first time, up 15% on the year, although Bloomberg reported that net new inflows into wealth management slowed to $8.5bn in the quarter, below market expectations.
UBS also highlighted continued progress on integrating Credit Suisse, raising its targeted cost synergies to $13.5bn after identifying an additional $500m of savings.
Cumulative gross cost reductions reached $10.7bn by the end of 2025, with around 85% of Swiss-booked accounts now migrated onto UBS systems and the wind-down of non-core and legacy assets continuing.
Risk-weighted assets in the non-core unit were reduced to $28.8bn.
"We made great progress on one of the most complex integrations in banking history while facing ongoing regulatory uncertainty in Switzerland," said chief executive Sergio Ermotti.
He added that UBS was confident of capturing the remaining synergies by the end of 2026 and reiterated the bank's ambition to reach an around 18% return on CET1 capital and a cost-income ratio of roughly 67% by 2028.
The bank maintained a strong capital position, with a CET1 capital ratio of 14.4% at the end of the quarter, down slightly from 14.8% previously.
UBS said it would propose a dividend of $1.10 per share at its annual general meeting, up 22% year on year, and plans to accrue for a mid-teens percentage increase in the dividend in 2026.
It also announced plans to repurchase at least $3bn of shares next year, adding that it would "aim to do more" subject to greater clarity on Switzerland's future regulatory regime.
Regulatory uncertainty continued to weigh on the group, as Swiss authorities considered higher capital requirements following the 2023 collapse of Credit Suisse.
UBS confirmed it remained on track to meet its 2026 exit-rate targets as integration entered its final stages, while Ermotti, who returned in 2023 to oversee the Credit Suisse rescue, was expected to step down in April 2027 once the process was complete.
At 0953 CET (0853 GMT), shares in UBS Group were down 1.21% in Zurich at CHF 36.65.
Reporting by Josh White for Sharecast.com.