Lawsuits contribute to big UBS loss in fourth quarter
Now Reading: Lawsuits contribute to big UBS loss in fourth quarter
Switzerland‘s biggest bank on 5 February reported a 1.9 billion Swiss Franks loss for the fourth quarter in the wake of a series of lawsuits, scandals and a wave of restructuring, RTE Ireland reported.
UBS, based in Zurich, attributed the loss mainly to „net charges for provisions for litigation, regulatory and similar matters as well as net restructuring charges and an own credit loss.“
In contrast, UBS made a net profit of 323 million Franks in the fourth quarter of 2011 despite a $ 2 billion rogue trading scandal.UBS said it ended the full year 2012 with a loss of more than 2.5 billion Franks, compared with a profit of 4.1 billion Franks for 2011.
The bank also said on 5 February that it is to buy back approximately 5 billion Franks of its own bonds in an attempt to reduce its funding costs.
Sergio Ermotti, who was appointed chief executive in November in the wake of a major trading scandal, said the bank nonetheless „made decisive progress in executing our strategy last year and started 2013 in a strong position.“
UBS is one of the world‘s largest managers of private wealth assets and is on the list of the 29 „global systemically important banks“ that the Bank for International Settlements, the central bank for central banks, considers too big to fail.
The reputations of UBS and the wider global banking sector were battered last year by an industry-wide investigation into alleged manipulations of the benchmark Libor interest rate, short for London interbank offered rate.
In December, UBS agreed to pay some $ 1.5 billion in fines to international regulators. In admitting to fraud in its Japanese unit, UBS became the second bank, after Britain‘s Barclays, to settle over the rate-rigging scandal.
UBS has also seen its reputation bruised by a London trial into a trading scandal and ongoing tax evasion probes. In September 2011, the bank announced more than $ 2 billion in losses and blamed a 32-year-old rogue trader, Kweku Adoboli, at its London office for Britain‘s biggest-ever fraud at a bank.
Britain‘s financial regulator fined UBS, saying its internal controls were inadequate. Adoboli has been sentenced to seven years in prison.