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UBS Posts Loss In Q4 On Charges; To Buy Back Up To CHF 5 Bln Debt


Swiss banking giant UBS AG (UBS) reported Tuesday a hefty net loss in its fourth quarter, as expected, due to provisions for litigation and regulatory matters and restructuring charges. In addition, the bank said it would launch tender offers to repurchase debt of up to about 5 billion francs, helping to lower its future funding costs. UBS also announced a 50 percent dividend increase for 2012 to 0.15 francs per share.

The bank said it remains on track with its accelerated strategic plans designed to make it more stable and capable of delivering higher quality and sustainable performance.

Looking ahead, the bank said, "While progress was made on many issues during 2012, many of the underlying challenges remain at the start of the new year. ..... It would make further improvements in prevailing market conditions unlikely and would consequently generate headwinds for revenue growth, net interest margins and net new money."

In its recently concluded fourth quarter, net loss attributable to shareholders was 1.89 billion Swiss francs or about $2.08 billion, as against a profit of 323 million francs a year before. Per share loss was 0.50 francs, compared with last year's 0.08 francs profit.

The company attributed the loss to net charges for provisions for litigation, regulatory and similar matters of 2.08 billion francs, restructuring charges of 258 million francs, and an own credit loss on financial liabilities of 414 million francs.

In December, UBS had said that it expected a loss as it agreed to pay about 1.4 billion francs in fines and disgorgement to settle LIBOR-related investigations on manipulation of key global benchmark interest rates.

Excluding own credit loss and the restructuring charges, adjusted pre-tax loss was 1.15 billion francs for the quarter.

However, total operating income grew to 6.22 billion francs from prior year's 5.86 billion francs.

Quarterly net interest income slipped 15 percent and net trading income fell 16 percent, while net fee and commission income grew 12 percent in the quarter.

For the year 2012, attributable net loss was 2.51 billion francs or 0.67 francs per share, compared to prior year's profit of 4.14 billion francs or 1.08 francs per share. Annual net interest income dropped to 5.99 billion francs from 6.83 billion francs last year.

Chief Executive Officer Sergio Ermotti said, "We made decisive progress in executing our strategy last year and started 2013 in a strong position. Our financial strength, our attractive and unique business mix and our enviable global client franchise give us a competitive advantage."

UBS shares closed trading on Monday at $17.19, down $0.39 or 2.22 percent.

by RTTNews Staff Writer

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