The Swiss bank UBS reported a net profit of 1.165 billion Swiss francs ($1.25 billion) for the whole of 2017, weighed down by a writedown in the fourth quarter that related to the new U.S. tax overhaul.
The consensus from a Reuters poll was for a figure of 1.257 billion Swiss francs, below the 2016 number of 3.3 billion Swiss francs and below the 2015 figure of 6.2 billion Swiss francs.
“2017 was an excellent year for us. We delivered stronger financial results and met our net cost reduction target,” Sergio Ermotti, the group’s chief executive officer, said in a statement.
“Greater regulatory clarity means we can open a new chapter for UBS, allowing us to sharpen our focus on growth across our businesses, make further investments in technology and deliver attractive returns to shareholders,” he added.
Net profit included a writedown of 2.865 billion Swiss francs in the fourth quarter of deferred tax assets due to the introduction a new tax cuts and the jobs act in the United States. It said that excluding this writedown, net profit would have increased by 26 percent year-over-year.
UBS also said on Monday that it would increase its dividend for investors to 0.65 Swiss francs per share — an 8 percent jump from last year. The bank also introduced a three-year share buyback program of up to 2 billion Swiss francs.
UBS also achieved its net cost reduction target of 2.1 billion Swiss francs but highlighted that low market volatility could affect client activity in its wealth management business. It also said it was creating a unified global wealth management division.
The Swiss bank is also cautious about the positive impact that rising U.S. interest rates might actually have on margins, given that rates are still very low in the euro zone and Switzerland.
