UBS Group AG (NYSE:UBS) Q4 2024 Earnings Conference Call February 4, 2025 3:00 AM ET Company Participants Sarah Mackey - Head, IR Sergio Ermotti - Group CEO Todd Tuckner - Group CFO Conference Call Participants Chris Hallam - Goldman Sachs Anke Reingen - RBC Capital Markets Jeremy Sigee - BNP Paribas Kian Abouhossein - JPMorgan Giulia Miotto - Morgan Stanley Stefan Stalmann - Autonomous Research Andrew Coombs - Citigroup Inc. Amit Goel - Mediobanca Antonio Reale - Bank of America Merrill Lynch Piers Brown - ...

Group 1: Financial Performance - UBS reported a fourth-quarter net profit of $770 million, which is below the mean forecast of $886.4 million from analysts [1] - Group revenue for the period reached $11.635 billion, slightly below analyst expectations of $11.64 billion [1] Group 2: Cost Savings and Restructuring - UBS aims to achieve $7.5 billion in cost savings out of a total of $13 billion by the end of 2023, with CEO indicating that redundancies are "inevitable" [2] - The bank is focusing on voluntary departures as part of its restructuring efforts [2] Group 3: Industry Context - The Swiss banking sector is experiencing broader expense discipline and restructuring, with other banks like Julius Baer and HSBC also announcing cost-saving measures [3] - UBS's balance sheet exceeded $1.7 trillion in 2023, raising concerns about its size relative to the Swiss economy [4] Group 4: Economic Environment - The Swiss economy is facing challenges, including low annual inflation of 0.6% in December and a strong Swiss franc, which has been further strengthened by global market conditions [5]

STAMFORD, Conn., Feb. 3, 2025 /PRNewswire/ -- Synchrony (NYSE: SYF) Chief Financial Officer, Brian J. Wenzel, will participate in a fireside chat at the UBS Financial Services Conference on Monday, February 10, 2025 at 9:40 a.m. (Eastern Time).A live webcast and replay will be made available on the Synchrony Investor Relations website at www.investors.synchrony.com. About SynchronySynchrony (NYSE: SYF) is a premier consumer financial services company delivering one of the industry's most complete digitally- ...

Core Insights - UBS has consistently beaten earnings estimates, with an average surprise of 118.45% over the last two quarters [1][2] - The most recent earnings report showed UBS earning $0.43 per share against an expectation of $0.28, resulting in a surprise of 53.57% [2] - UBS's positive Earnings ESP of +54.55% indicates bullish sentiment among analysts regarding the company's earnings prospects [6] Earnings Performance - In the previous quarter, UBS reported earnings of $0.34 per share, surpassing the consensus estimate of $0.12, which resulted in a surprise of 183.33% [2] - The combination of a positive Earnings ESP and a Zacks Rank of 3 (Hold) suggests a high likelihood of another earnings beat [3][6] Predictive Metrics - Stocks with a positive Earnings ESP and a Zacks Rank of 3 or better have a nearly 70% chance of producing a positive surprise [4] - The Zacks Earnings ESP compares the Most Accurate Estimate to the Zacks Consensus Estimate, reflecting the latest analyst revisions [5] Future Outlook - UBS's next earnings report is expected to be released on February 4, 2025 [6]

Group 1 - Proactive provides fast, accessible, informative, and actionable business and finance news content to a global investment audience [2][3] - The news team covers a wide range of sectors including biotech, pharma, mining, natural resources, battery metals, oil and gas, crypto, and emerging technologies [3] - Proactive has a presence in key finance and investing hubs with bureaus and studios located in major cities such as London, New York, and Sydney [2] Group 2 - The company emphasizes the use of technology to enhance workflows and improve content production [4] - Proactive employs automation and software tools, including generative AI, while ensuring that all content is edited and authored by humans [5]

Group 1 - Proactive provides fast, accessible, informative, and actionable business and finance news content to a global investment audience [2][3] - The news team covers a wide range of sectors including biotech, pharma, mining, natural resources, battery metals, oil and gas, crypto, and emerging digital and EV technologies [3] - Proactive has a presence in key finance and investing hubs with bureaus and studios located in London, New York, Toronto, Vancouver, Sydney, and Perth [2] Group 2 - The company emphasizes the use of technology to enhance workflows and has adopted automation and software tools, including generative AI, while ensuring all content is edited and authored by humans [4][5]

UBS Group AG Settlement and Legal Issues - UBS Group AG is nearing a settlement with the US government, potentially involving hundreds of millions of dollars in fines related to tax evasion at Credit Suisse, which UBS acquired after its collapse in 2023 [1] - The settlement with the US Justice Department could be finalized as early as this week, following a 2014 plea agreement where Credit Suisse admitted to aiding wealthy Americans in tax evasion [2] - UBS has been questioned by the Justice Department regarding hundreds of millions of dollars in accounts closed shortly after the 2014 plea agreement but not disclosed to US authorities, allowing some account holders to transfer funds to tax havens [3] - A 2023 Senate investigation revealed that Credit Suisse likely concealed hundreds of millions of dollars in accounts post-2014 plea agreement, with UBS setting aside nearly $4 billion to handle investigations and litigation related to the acquisition [4] UBS Group's Prior Legal Challenges - UBS settled a civil dispute in August 2023 by paying a $1.44 billion civil penalty to the US Department of Justice over allegations of misconduct in the underwriting and sale of residential mortgage-backed securities issued between 2006 and 2007 [5] - Since acquiring Credit Suisse, UBS has faced class action lawsuits and grievances from former Credit Suisse employees and individual stockholders, which are expected to increase expenses and negatively impact profitability [6] UBS Group's Financial Performance - UBS shares have gained 4.6% on the NYSE over the past six months, slightly below the industry's growth of 4.9% [10] Legal Issues Faced by Other Banks - Deutsche Bank Securities Inc, a subsidiary of Deutsche Bank, was fined $4 million by the Securities and Exchange Commission in December 2024 for failing to promptly file Suspicious Activity Reports as required by the Bank Secrecy Act [9] - HSBC Bank Australia was sued by the Australian Securities and Investments Commission for failing to protect customers from scams, resulting in losses of approximately A$23 million ($14.6 million) between January 2020 and August 2024, with A$16 million ($10.2 million) lost between October 2023 and March 2024 [11][12]

Settlement and Legal Provisions - UBS is reportedly set to settle a case involving Credit Suisse, which it acquired in 2023, by paying hundreds of millions of dollars to the U S Department of Justice [1] - The case stems from Credit Suisse's failure to comply with a 2014 agreement with the DOJ, where it pledged to provide information on undeclared American-held accounts but failed to report the closure of accounts worth hundreds of millions of dollars, enabling some U S taxpayers to evade detection [2] - As part of the acquisition, UBS allocated approximately $4 billion in legal provisions to address unresolved cases against Credit Suisse [3] Merger and Integration - UBS completed its merger with Credit Suisse in June 2023, inheriting all rights and obligations of the former rival Swiss banking giant [4] - The Swiss Financial Market Supervisory Authority (FINMA) required UBS to revise its recovery and emergency plans post-acquisition, emphasizing the need to harmonize group structures, processes, and IT platforms [4][5] - UBS confirmed it had already begun implementing these changes, aligning with FINMA's requirements to enhance crisis preparedness and resolution planning [5][6] Resolution Planning - FINMA acknowledged that UBS meets current resolvability requirements under its preferred resolution strategy but emphasized the need for further development of resolution planning following the Credit Suisse crisis [6] - UBS stated it had initiated work to expand and refine its resolution plans in response to the lessons learned from the Credit Suisse crisis and its subsequent rescue [6]

Group 1 - UBS is reportedly close to paying "at least hundreds of millions of dollars" in penalties to settle U.S. tax evasion violations related to Credit Suisse, which UBS acquired in 2023 [1][5] - The potential settlement with the U.S. Justice Department could occur as soon as this week, following a 2014 plea agreement where Credit Suisse admitted to aiding wealthy Americans in tax evasion [1][5] - Credit Suisse had previously agreed to disclose American accounts but allegedly continued to hide accounts, leading to further scrutiny from the Justice Department [2][3] Group 2 - The 2014 plea deal included $2.6 billion in fines, and UBS set aside approximately $4 billion to address ongoing investigations and lawsuits after acquiring Credit Suisse [4] - A Senate investigation in 2023 indicated that Credit Suisse likely concealed hundreds of millions of dollars in accounts after the plea deal, which were not reported to U.S. regulators until whistleblowers intervened [4][5] - UBS has not yet responded to requests for comment regarding the ongoing investigation and potential settlement [4][5]

Core Viewpoint - UBS Research upgraded Novo Nordisk's stock to "buy" from "neutral," citing that the recent sell-off was "overdone" [2] Group 1: Stock Performance and Analyst Actions - Novo Nordisk's shares rose after the upgrade, with Copenhagen-listed shares closing up approximately 2.8% and U.S.-listed shares up nearly 2% at $84.94 [6] - UBS lowered the price target for Novo Nordisk's domestic shares to 750 Danish kroner ($103.55) from 1,100 kroner, while the stock closed at 619.50 kroner, about 40% below its record close of 1,028 kroner on June 25, 2024 [2][6] Group 2: Market Outlook and Drug Performance - Analysts view the recent decline in stock price as an "attractive entry point," anticipating growth in the weight-loss drug market in the first quarter of the year [3] - Novo Nordisk is a leader in the weight-loss drug market with its products Ozempic and Wegovy, competing with Eli Lilly's Mounjaro and Zepbound [3] Group 3: Sales Projections and Patent Expiration - UBS analysts projected "risk adjusted peak sales" of $75 billion annually through 2031, down from a previous estimate of $80 billion, due to upcoming patent expirations in Europe (2031) and the U.S. (2032) [5] - The lowered sales projection is also influenced by disappointing trial results for Novo Nordisk's newest weight-loss drug, although it is still expected to be more effective than Ozempic [4][5]