Wealth check

1 Feb 2022 By Liam Proud Follow @liamwardproud

CEO Ralph Hamers’ job is to get a valuation closer to the U.S. group’s 2.5 times tangible book value multiple, compared with his $68 billion bank’s 1.2. New buybacks help, but the missing ingredient is growth. Investors are understandably sceptical that Hamers can change that.

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UBS on Feb. 1 said it generated $8.7 billion of revenue in the final three months of 2021, up 8% compared with the same period a year earlier. Pre-tax profit fell by 13% year-on-year to $1.7 billion, partly because of a legal charge the bank booked in relation to a French case about allegedly helping clients evade taxes.

Chief Executive Ralph Hamers also unveiled new profitability targets for the Swiss group. He is aiming for a 15% to 18% return on common equity Tier 1 capital over time, and a cost-to-income ratio of between 70% and 73%.

In 2021 UBS’ return on CET1 was 17.5% and its costs were roughly 74% of revenue.

Analysts reckon the bank will generate a 14.1% return on CET1, with a 74% cost-income ratio, both this year and next, based on company-supplied consensus estimates collected on Jan. 11.

UBS shares rose 6% at 0923 GMT on Feb. 1.

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In 2021 UBS’ return on CET1 was 17.5% and its costs were roughly 74% of revenue.

Analysts reckon the bank will generate a 14.1% return on CET1, with a 74% cost-income ratio, both this year and next, based on company-supplied consensus estimates collected on Jan. 11.

UBS shares rose 6% at 0923 GMT on Feb. 1.

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