The largest bank of Switzerland UBS (CVE:UBS.H) has declared its fourth-quarter results, and it is not impressive. Their net profit has almost halved as compared to the same period of 2015. The only silver lining is that the results surpassed the expectations of analysts, which was mostly even poorer.
Net profit in the last quarter stood at $737.3 million or 738 million Swiss francs, while in 2015, this was 949 Swiss francs. The bank blames geopolitics and macroeconomics for negatively impacting sentiment, which eventually affected the financial figures.
On Friday, UBS declared an ordinary dividend of 0.60 Swiss francs for each stock for 2016, which was according to market expectations, and remains unchanged from the earnings of 2015.
UBS Results Beat the Predictions of Most Analysts
Most analysts had however predicted that the net profit of UBS would be much worse, somewhere around 339 million Swiss francs. What they eventually disclosed naturally surprised the market, because the bank was able to reap in almost double the predicted amount. In fact, analysts at HSBC had predicted a figure that was much lower at 163 million francs. Also, the 2015 figure was kind of artificial because the bank had gained from a net tax benefit of 715 million Swiss francs back then.
The CEO Promises Better Results Because of Improved Sentiments
Sergio Ermotti, the Chief Executive of UBS is promising even better results in the near future, because he says the Trump win has been a “turning point”. Speaking to reporters on Friday at the bank’s headquarter in Zurich he said sentiments about the financial markets and the economy in general has improved significantly since Donald Trump was elected as the US President.
“We have data points pointing at clients and investors being more optimistic and ready to be constructive about the situation”. There has been a period of gloom for a long time, and the human desire to change will create a positive impact, he added.
Sergio explained how this might happen by saying, “They are really looking for concrete actions by the new administration in the U.S. to then go into investing in the markets but what I think is much more important is also potentially investing in their underlying businesses which is really going to boost the economy”.
Brexit might still be a threat to UBS and its business. The UBS (CVE:UBS.H) CEO acknowledged that are likely to be huge changes ahead.