By Simon Miller
Swiss bank UBS has achieved a full-year pre-tax profit of CHF5.5bn (£3.8bn) and a Basel 2.5 tier 1 ratio of 16% according to figures released today.
After a turbulent year that saw the bank take a £1.5bn in suspected fraud action by Kweku Adoboli, who pleaded not guilty at Southwark Crown Court last month, and the losses of senior management, UBS claimed it was now able to deliver stability.
UBS group CEO Sergio Ermotti commented: More than ever, our clients demand safety, stability and the best investment advice to steer them successfully through turbulent markets. We are uniquely positioned to deliver exactly this.”
UBS also reduced its Basel III risk-weighted assets by an estimated CHF20bn which, combined with 13% in Basel III tier 1 common equity sent a “clear signal about safety and stability” according to the bank.
The bank said that in a “clear expression” of optimism about the firm’s future, UBS was repeating its proposal of a dividend of CHF0.10 per share for the 2011 financial year and then implement a capital return programme.
In addition, UBS also intends to issue loss-absorbing capital in 2012 as a step to meet Swiss regulatory requirements to hold up to 19% in total Basel III capital in the future.
However, the investment bank had a poor fourth quarter despite actively reducing VaR and RWA in turbulent markets. Although it had strong performance in credit, macro and emerging markets, the effects of challenging market conditions led to a Q4 pre-tax loss of CHF256m.