UBS Stock: Bank Announces $3B Buyback After Strong Q4 Earnings Beat

TLDR

• UBS reported Q4 net profit of $1.2 billion, beating analyst estimates of $919 million by 31%
• The bank announced a $3 billion share buyback program for 2026, matching last year’s amount
• UBS raised its dividend 22% to $1.10 per share and increased cost-saving targets by $500 million to $13.5 billion
• The bank’s invested assets topped $7 trillion for the first time, cementing its position as the world’s largest wealth manager
• Analysts have a Moderate Buy rating on UBS stock with an average price target implying 6.73% upside

UBS Group delivered a strong fourth quarter, posting net profit of $1.2 billion. That’s a 56% jump from the same period last year.

The result crushed analyst expectations of $919 million. Revenue hit $12.1 billion, right in line with forecasts.

The Swiss bank credited solid performances across its wealth management, investment banking, and core banking divisions. Its invested assets crossed $7 trillion for the first time ever.

UBS Group AG, UBS

The bank’s capital position remains healthy. Its CET1 capital ratio stood at 14.4%, slightly down from the previous quarter but still strong.

Buyback and Dividend Boost

UBS rolled out a $3 billion share buyback program for 2026. That matches what it repurchased in 2025.

The bank said it wants “to do more” but needs clarity on Switzerland’s future banking regulations first. Swiss authorities have proposed tougher capital rules after UBS took over Credit Suisse in 2023.

The dividend got a nice bump too. UBS raised it to $1.10 per share, a 22% increase from the previous year.

Integration Progress Continues

About 85% of Swiss-booked Credit Suisse accounts have moved to UBS systems. CEO Sergio Ermotti expressed confidence in capturing remaining synergies by year-end.

The bank boosted its cost-saving program by $500 million. The new target sits at $13.5 billion.

UBS brought in $8.5 billion in net new assets to its global wealth management division during the quarter. Asia, Europe, and the Middle East showed strong inflows.

The U.S. market was a different story. The bank experienced outflows there after losing some relationship managers.

Looking Ahead

UBS brought back a previously shelved target. It now aims for an 18% return on CET1 capital by 2028.

The bank also set a more aggressive cost-income ratio goal of around 67% by 2028. That’s better than its current target of below 70%.

For the first quarter of 2026, UBS expects a low single-digit percentage decline in global wealth management’s net interest income. The bank sees steady global growth and easing inflation for the year ahead.

Capital markets activity and deal pipelines are expected to stay healthy. Wall Street analysts give UBS a Moderate Buy rating with eight Buys, two Holds, and three Sells.

The average price target of $50.88 suggests 6.73% upside potential. Ermotti is expected to step down by mid-2027, though the timeline isn’t finalized.

Several internal candidates are being considered as potential successors. Few external names have emerged so far.

UBS shares were down 1.6% in early trading following the earnings release. The broader European banking index rose 0.2% during the same period.

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