UBS Group (UBS)·Q4 2025 Earnings Summary
UBS Smashes Q4 Estimates as Integration Nears Finish Line, Stock Falls on Swiss Regulatory Uncertainty
February 4, 2026 · by Fintool AI Agent
UBS Group AG delivered a strong close to 2025, crushing analyst expectations on earnings while demonstrating significant progress on its Credit Suisse integration. The Swiss banking giant reported underlying pre-tax profit of CHF 2.9 billion, up 62% year-over-year, driven by momentum across Global Wealth Management and the Investment Bank.
Despite the strong results, shares fell approximately 5% in after-hours trading to $45.12 as investors focused on uncertainty surrounding Swiss capital requirements and cautious management commentary about the regulatory outlook.
Did UBS Beat Earnings?
Yes, decisively. UBS delivered significant beats across all major financial metrics in Q4 2025:
Values retrieved from S&P Global
The reported net profit of CHF 1.2 billion and EPS of CHF 0.37 were impacted by a CHF 457 million loss from buying back legacy Credit Suisse debt instruments issued at distressed spreads, as well as CHF 1.1 billion in integration-related expenses.
On an underlying basis, total revenues increased 10% versus the prior year, driven by strong top-line growth in both Global Wealth Management and the Investment Bank. The cost-income ratio improved to 75%, with return on CET1 capital reaching 11.9%.
Ask Fintool AI AgentWhat Did Management Guide?
CFO Todd Tuckner outlined ambitious targets for 2026 and beyond:
2026 Full-Year Guidance:
- Underlying return on CET1 capital: ~13%
- Cost-income ratio: ~73%
- Effective tax rate: ~23% (up from 12% in 2025)
- GWM net new assets: >CHF 125 billion
- Americas pre-tax margin: ~15%
2026 Exit Rate Targets:
- Underlying return on CET1 capital: ~15%
- Underlying cost-income ratio: <70%
2028 Ambitions:
- Reported return on CET1 capital: ~18%
- Reported cost-income ratio: ~67%
- GWM net new assets: >$200 billion annually
Management raised the gross cost savings target by CHF 500 million to CHF 13.5 billion, reflecting newly identified synergies in the planning process.
How Did Each Business Segment Perform?
Global Wealth Management
The crown jewel of UBS delivered pre-tax profit of CHF 1.6 billion, up 45% YoY, with all four regions growing profitability:
Full-year net new assets reached CHF 101 billion (2.4% growth), with invested assets exceeding CHF 4.8 trillion.
Investment Bank
Pre-tax profit surged 56% to CHF 703 million on record revenues of CHF 11.8 billion for the full year (+18% YoY).
- Global Markets: Revenues +17% to CHF 2.2 billion — strongest Q4 on record globally and in every region
- Equities: +9% driven by prime brokerage, record market share in cash equities
- FRC (FX, Rates, Credit): +46% with FX and precious metals standouts
- Banking: +2% with ECM up 68%, offsetting softer sponsor activity
Return on attributed equity reached 15% for the full year, achieved with essentially no incremental RWA.
Personal & Corporate Banking
Pre-tax profit declined 5% to CHF 543 million as lower Swiss interest rates weighed on NII, which fell 10% YoY.
Management expects P&C NII to increase mid-single digits in 2026 (USD terms) despite zero-rate environment, supported by FX translation, the liability management exercise, and loan growth.
Asset Management
Pre-tax profit increased 20% to CHF 268 million, with revenues up 4% on 11% higher net management fees. The division achieved its 2026 exit rate cost-income target a year early at 66%.
How Did the Stock React?
Despite the earnings beat, UBS shares fell approximately 5.3% in after-hours trading:
The disconnect between results and stock reaction reflects investor concerns about:
- Swiss Regulatory Uncertainty: CEO Sergio Ermotti noted the capital ordinance expected "later in the first half" with implementation details still unclear
- Higher Tax Rate: Normalized 23% rate in 2026 vs 12% in 2025
- U.S. Wealth Flows: Americas NNA outflows of CHF 14 billion in Q4, expected to remain a headwind through H1 2026
Capital Returns & Balance Sheet
UBS announced a robust capital return program:
Dividend:
- 2025 ordinary dividend: CHF 1.10 per share (+22% YoY)
Share Buybacks:
- 2025: CHF 3 billion completed
- 2026: CHF 3 billion planned, with "aim to do more"
- ~CHF 2 billion expected in H1 2026
Capital Position:
- CET1 capital ratio: 14.4% (target: ~14%)
- CET1 leverage ratio: 4.4% (target: >4%)
- Total loss-absorbing capacity: CHF 187 billion
- Tangible book value per share: $26.93 (+1% QoQ)
The bank upstreamed CHF 9 billion of capital from subsidiaries in Q4, including CHF 4 billion from Credit Suisse International UK and CHF 3 billion from the U.S. IHC, reducing RWAs at UBS AG by CHF 26 billion.
Ask Fintool AI AgentIntegration Progress: Final Mile
The Credit Suisse integration is approaching completion:
Milestones Achieved:
- CHF 10.7 billion cumulative gross cost saves delivered
- Full-year 2025 net profit: CHF 7.8 billion (+53% YoY)
- Non-Core and Legacy RWAs reduced by two-thirds since acquisition
Remaining Work (2026):
- Swiss client account migration to complete by end of Q1 2026
- CHF 2.8 billion additional gross cost saves targeted
- CHF 2 billion additional integration-related expenses expected
- NCL operating expenses to exit 2026 at ~CHF 500 million (40% of 2025)
CEO Ermotti emphasized: "The final wave of Swiss-booked clients' migration has the highest level of complexity and is a key dependency to fully winding down the legacy infrastructure. We cannot be complacent and have to maintain the same level of focus and intensity as we approach the last mile."
Q&A Highlights
On U.S. Wealth Management: CFO Tuckner confirmed net recruiting outflows will continue through H1 2026, but expects Americas to be a "positive contributor to GWM net flows in 2026 overall." The national bank charter conditional approval provides a "clear path to further expand our banking platform."
On Swiss Capital Requirements: Ermotti defended AT1 instruments: "Without AT1, Credit Suisse would have gone through a resolution on Monday morning... The Basel Committee has confirmed its total backing of the AT1 as a vital part of the capital stack."
On the LME (Liability Management Exercise): The November buyback of CHF 8.5 billion legacy Credit Suisse debt will provide ~CHF 100 million annual benefit across GWM, P&C, and NCL for the next three years.
On FX Sensitivity: A further 10% drop in USD vs other currencies would drive 3% PBT accretion while placing low double-digit basis point headwind on capital and leverage ratios.
Key Risks & Concerns
- Swiss Capital Ordinance: Expected in H1 2026 with unknown impact; may delay additional buybacks
- U.S. Advisor Attrition: Net recruiting headwinds expected to persist through mid-2026
- Swiss Interest Rates: Zero-rate environment pressuring P&C net interest income
- Basel III Output Floor: Expected 2% RWA impact by 2028 when 72.5% floor fully phases in
- Operational Risk RWAs: Swiss internal loss multiplier driving CHF 40 billion higher op-risk RWAs vs UK/EU/US approach
Forward Catalysts
Ask Fintool AI AgentThe Bottom Line
UBS delivered an exceptional Q4 2025, demonstrating that the Credit Suisse integration is generating real financial returns. Full-year net profit of CHF 7.8 billion (+53% YoY), record Investment Bank revenues, and CHF 101 billion in wealth management net new assets underscore the power of the combined franchise.
However, the stock's negative reaction reflects legitimate near-term concerns: Swiss regulatory uncertainty, the final integration complexity, and continued U.S. advisor attrition. With the critical Swiss client migration completing this quarter and CHF 3 billion in planned buybacks, 2026 will be the definitive test of whether UBS can deliver on its ambitious return targets.
The market appears to be waiting for clarity on Swiss capital requirements before re-rating the stock higher. Management's confidence is notable — they're already accruing for 2027 buybacks — but investors want proof that the "last mile" of integration executes as smoothly as the first 95%.
Data sources: UBS Q4 2025 Earnings Call Transcript, S&P Global