UBS reaps rich rewards from pandemic

UBS reported its highest annual pre-tax profit of the post financial crisis era on Tuesday (January 26).

As lending to the world's ultra-rich and bumper trading volumes during the global pandemic triggered a surge in revenue.

The results beat forecasts, thanks to investment gains and lower provisions for expected credit losses.

The Swiss bank posted fourth-quarter net profit of $1.7 billion, nearly double analysts predictions.

UBS, the world's largest wealth manager, derives the biggest chunk of its profits from advising and managing money for the world's rich.

It also maintains smaller global investment banking and asset management operations.

It conducts retail and corporate banking only in its home market.

The business model paid off in 2020.

Its low-risk lending book, comprised primarily of mortgages and loans to the wealthy

as well as a smaller portion of corporate and retail credits in its prosperous home market of Switzerland - suffered fewer losses than many high street peers.

UBS also benefitted from volatile and rising equity markets, which saw investments and transactions pick up.