ZURICH: UBS, Switzerland’s biggest bank, forecast an uncertain year ahead due to the war in Ukraine and sagging client confidence on Tuesday, despite trumping expectations for 2022 with a $7.6 billion net profit.

The world’s largest wealth manager kicked off a round of business results for Europe’s banks, after Wall Street embarked on job cutting in the face of fading economic growth.

Shares in UBS slipped close to 4% after it cautioned that inflation and the war in Ukraine were clouding the future, dampening the mood among its wealthy clients. It said that lower asset prices and weaker confidence could affect its business, although it would also gain from higher interest rates.

The Zurich-based bank reported a 23% rise in net profit attributable to shareholders of $1.7 billion for the quarter just ended, helped by a fall in costs, despite a drop in financial markets. That compared with the $1.3 billion average of 21 analyst estimates in a UBS-conducted poll.

Full-year net profit reached $7.6 billion, compared with the consensus estimate of $7.3 billion.

A fall in income from fees and commissions linked to lower client activity was partly offset by a rise in net interest income, including a 35% gain in global wealth management.

“While the macroeconomic outlook remains uncertain, our operational resilience ... put us in a great position to serve our clients, fund growth and deliver strong capital returns,” UBS Chief Executive Ralph Hamers said.

“We are starting 2023 from a position of strength”.

Analysts gave the results a lukewarm welcome. Zuercher Kantonalbank analyst Michael Klien said UBS had benefited from one-offs, including a lower than expected tax rate. Jefferies analysts said the same, describing the results as ‘mixed’.

Credit Suisse, the bank’s cross-town rival, will report on Feb. 9 having flagged a quarterly pre-tax loss of as much as 1.5 billion francs ($1.6 billion) after hefty client withdrawals in the wake of a string of scandals and losses.