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UBS Group (UBS) Slashes Bonus Pool, Restates 2016 Earnings
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The Swiss banking giant, UBS Group AG (UBS - Free Report) has cut its 2016 bonus pool by more than 17%. Per its latest annual report, the bank’s bonus pool declined to CHF 2.9 billion ($2.9 billion) amid lower profits and a tough operating backdrop.
Axel A. Weber, Chairman of UBS Group, said, “2016 was another challenging year for the industry and UBS, marked by macroeconomic uncertainty, geopolitical tensions and divisive politics, which adversely affected client sentiment.”
Significant market volatility at the beginning of 2016 hurt UBS Group’s profitability. Also, owing to its strategy to focus on wealth management business, the bank was unable to benefit from the rebound in bond trading in the latter half of the year.
Additionally, the bank continues to face legal hassles. Notably, UBS Group restated its 2016 results attributable to rise in legal provision to include “an agreement in principle to resolve the RMBS matter related to the National Credit Union Association.” This lowered its net profit attributable to shareholders by CHF 102 million or CHF 0.02 per share.
Further, UBS Group reduced the 2016 pay of its CEO, Sergio Ermotti. He received a total compensation of CHF 13.7 million, down over 4% year over year and included CHF 10.9 million in variable compensation for his fifth full year as the company CEO.
UBS Group is not the only one lowering its 2016 bonus pool. Other banks including Deutsche Bank AG (DB - Free Report) , HSBC Holdings Plc (HSBC - Free Report) and Barclays Plc (BCS - Free Report) have also reduced their bonus pools, amid a challenging operating environment.
Notably, due to its disappointing financial performance, UBS Group’s shares lost 19.1% in 2016, as against a gain of 5.9% for the Zacks categorized Foreign Banks industry.
Despite the dismal share price and financial performance in 2016, UBS Group continued to make progress toward its cost saving targets. The company is on track to achieve its net cost reduction target of CHF 2.1 billion by the end of this year.
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UBS Group (UBS) Slashes Bonus Pool, Restates 2016 Earnings
The Swiss banking giant, UBS Group AG (UBS - Free Report) has cut its 2016 bonus pool by more than 17%. Per its latest annual report, the bank’s bonus pool declined to CHF 2.9 billion ($2.9 billion) amid lower profits and a tough operating backdrop.
Axel A. Weber, Chairman of UBS Group, said, “2016 was another challenging year for the industry and UBS, marked by macroeconomic uncertainty, geopolitical tensions and divisive politics, which adversely affected client sentiment.”
Significant market volatility at the beginning of 2016 hurt UBS Group’s profitability. Also, owing to its strategy to focus on wealth management business, the bank was unable to benefit from the rebound in bond trading in the latter half of the year.
Additionally, the bank continues to face legal hassles. Notably, UBS Group restated its 2016 results attributable to rise in legal provision to include “an agreement in principle to resolve the RMBS matter related to the National Credit Union Association.” This lowered its net profit attributable to shareholders by CHF 102 million or CHF 0.02 per share.
Further, UBS Group reduced the 2016 pay of its CEO, Sergio Ermotti. He received a total compensation of CHF 13.7 million, down over 4% year over year and included CHF 10.9 million in variable compensation for his fifth full year as the company CEO.
UBS Group is not the only one lowering its 2016 bonus pool. Other banks including Deutsche Bank AG (DB - Free Report) , HSBC Holdings Plc (HSBC - Free Report) and Barclays Plc (BCS - Free Report) have also reduced their bonus pools, amid a challenging operating environment.
Notably, due to its disappointing financial performance, UBS Group’s shares lost 19.1% in 2016, as against a gain of 5.9% for the Zacks categorized Foreign Banks industry.
Despite the dismal share price and financial performance in 2016, UBS Group continued to make progress toward its cost saving targets. The company is on track to achieve its net cost reduction target of CHF 2.1 billion by the end of this year.
Currently, UBS Group carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here
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