The US wealth management division, which is counted separately, had an even rougher quarter, seeing its operating profit plunge 94 per cent to just US$13 million amid “substantial charges for litigation, regulatory and similar matters”.
Advertisement
Despite an improvement in profits in some of its smaller divisions – such as personal and corporate banking, and asset management – the news could not stop UBS’ shares falling by 7pc.
“Going forward, we will continue with the disciplined execution of our strategy while investing for profitable and sustainable growth”.
The update came as the Zurich-based bank reported net income for the final three months of the year of 949 million Swiss francs ($931.5 million), up from 858 million francs in the same quarter a year earlier, boosted by a tax benefit.
Excluding the U.S., UBS’s wealth management business net outflows of $3.3 billion, the first time in nearly six years that the bank was unable to report an overall increase in new client money.
UBS’s investment bank reported adjusted pretax profit of 223 million francs for the fourth quarter, alongside a decline in revenue from its equities business and an uptick in the foreign exchange, rates and credit unit.
The group board will propose a total dividend of 0.85 Swiss francs per share to be paid out to shareholders, above analyst forecasts of 0.81 Swiss francs per share.
UBS’s strong earnings have bucked the trend at most of its European peers, many of which are trailing the Swiss bank when it comes to overhauling their investment banks.
“UBS is a well restructured bank but is not immune to an Asia slowdown in our view”, JPMorgan Cazenove analysts wrote in a research note, keeping a neutral rating on the stock. The result beat estimates for 867 million francs compiled by financial information provider FactSet.
Advertisement
The bank acknowledged that its “fourth quarter was characterised by very low levels of client activity and pronounced risk aversion”.
