UBS last issued financial targets in 2012 as part of a wide-ranging restructuring and pullback from investment banking. More than five years on, the Swiss bank is walking most of them back and abandoning others.
The Zurich-based firm's current targets are rooted in its reinvention back in 2012. The last time UBS fine-tuned them was in 2014, leaving analysts and investors hankering for an update.
They got one on Monday, alongside fourth-quarter results – just not the ones they may have wanted. finews.com takes a closer look:
1. Net New Money
UBS merged its larger private bank in Asia, Europe, Latin America and the Middle East with a U.S. brokerage it has until now independently managed. The newly-combined division targets net new money growth of 2 to 4 percent – which means it is adopting the U.S. arm's lower goal. The wider private bank had until now targeted growth against existing assets of 3 to 5 percent.
2. Cost-Income Ratio
The mega-merger of private banking arms will target a cost-income ratio of 65 to 75 percent. The main wealth unit previously targeted 55 t0 65 percent, and the American arm 75 to 85 percent.
3. Net Interest Margin
UBS' retail and company banking unit will aim for a net interest margin of 150 to 165 basis points. This represents a far narrower bandwidth from 140 to 180 basis points. The remaining targets of cost-income ratio and money growth are unchanged.
4. Asset Management
Unsurprisingly, UBS has ditched its unrealistic target of 1 billion Swiss francs pre-tax profit from the unit. Instead, the unit will post 10 percent growth in pre-tax profit every year – it already achieved a nearly 28 percent rise last year compared to 2016.
5. Entire UBS
While the investment bank's 2014 remain in place, the wider bank now targets an average return on equity of 15 percent – this is just a smidgen lower from the more than 15 percent it targeted until now.
