UBS Group (UBS, Financial) is reportedly in the final stages of discussions to establish a strategic alliance with General Atlantic. This collaboration is aimed at penetrating the substantial $1.6 trillion private credit market.
The proposed partnership would see UBS's investment bank take on the role of originating loans, while General Atlantic's GA Credit division would benefit from preferred status in these financial transactions. This initiative is set to target borrowers primarily located in North America and Europe.
This move highlights UBS's ambition to expand its footprint in the lucrative private credit sector, leveraging General Atlantic’s influence and expertise to capitalize on emerging opportunities within these regions.
Wall Street Analysts Forecast
Based on the one-year price targets offered by 2 analysts, the average target price for UBS Group AG (UBS, Financial) is $35.41 with a high estimate of $39.12 and a low estimate of $31.70. The average target implies an upside of 20.69% from the current price of $29.34. More detailed estimate data can be found on the UBS Group AG (UBS) Forecast page.
Based on the consensus recommendation from 2 brokerage firms, UBS Group AG's (UBS, Financial) average brokerage recommendation is currently 3.0, indicating "Hold" status. The rating scale ranges from 1 to 5, where 1 signifies Strong Buy, and 5 denotes Sell.
Based on GuruFocus estimates, the estimated GF Value for UBS Group AG (UBS, Financial) in one year is $28.60, suggesting a downside of 2.52% from the current price of $29.34. GF Value is GuruFocus' estimate of the fair value that the stock should be traded at. It is calculated based on the historical multiples the stock has traded at previously, as well as past business growth and the future estimates of the business' performance. More detailed data can be found on the UBS Group AG (UBS) Summary page.
Key Business Developments
Release Date: February 04, 2025
- Full-Year Net Profit: $5.1 billion.
- Underlying Return on CET1 Capital: 8.7%.
- CET1 Capital Ratio: 14.3%.
- Proposed Dividend for 2024: $0.90, a 29% increase year on year.
- Fourth Quarter Profit Before Tax: $1.8 billion.
- Fourth Quarter EPS: $0.23.
- Fourth Quarter Total Revenues: $11 billion, a 6% increase.
- Fourth Quarter Operating Expenses: $9.1 billion, a 6% decrease year over year.
- Global Wealth Management Pretax Profit: $1.1 billion, an increase of over 80%.
- Net New Assets for Global Wealth Management: $18 billion in the fourth quarter.
- Net New Assets for Full Year 2024: $97 billion.
- Personal and Corporate Banking Fourth Quarter Pretax Profit: CHF572 million, down 18%.
- Asset Management Pretax Profit: $224 million, a 20% increase.
- Investment Bank Pretax Profit: $452 million, with a 37% increase in revenue.
- Non-Core and Legacy Pretax Loss: $606 million.
- Balance Sheet Total Assets: $1.6 trillion.
- End-of-Period Loans: $600 billion.
- End-of-Period Deposits: $750 billion.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
- UBS Group AG (UBS, Financial) reported a strong full-year net profit of $5.1 billion for 2024, reflecting robust financial performance.
- The company achieved a CET1 capital ratio of 14.3%, indicating a strong capital position.
- UBS Group AG (UBS) successfully completed key integration milestones, including major legal entity mergers and client account migrations in several regions.
- The company proposed a 29% increase in its dividend to $0.90 for the financial year 2024.
- UBS Group AG (UBS) delivered significant cost savings, achieving $7.5 billion in cumulative gross run rate cost saves by the end of 2024.
Negative Points
- UBS Group AG (UBS) faces headwinds from lower interest rates, particularly in the Swiss franc and euro, impacting net interest income.
- The company anticipates elevated credit loss expenses in 2025, particularly from pre-acquisition Credit Suisse portfolios.
- UBS Group AG (UBS) expects non-core and legacy operations to weigh on financial performance in 2025, with a projected pretax loss of around $2.2 billion.
- The integration of Credit Suisse is expected to incur additional costs, with cumulative integration-related expenses now estimated at $14 billion.
- UBS Group AG (UBS) faces potential regulatory challenges in Switzerland, which could impact capital requirements and returns.
