Zurich, Switzerland (4E) – UBS announced on Tuesday a huge loss for the fourth quarter due to costs that covered the legal settlement for its role in an interest rate manipulation scandal.
The Swiss bank reported a net loss of 1.89bn Swiss francs ($2.08bn) in the quarter ended Dec. 31, compared with a profit of 323mn francs in the previous year. In a survey by Bloomberg, analysts estimated an average loss of 2.16bn francs.
The Zurich-based bank agreed in December to pay $1.5bn in fines for its involvement in a scheme with other banks and brokers to manipulate the Libor interbank offered rate and other benchmark interest rates. The settlement followed a penalty they paid for charges that it had helped some clients avoid taxes in the U.S.
UBS chief executive Sergio Ermotti seeks to boost the bank’s profitability by targeting a return on equity of 15 per cent in 2015. The bank has already announced job cuts of 10,000 over three years and plans to shift more focus on money management businesses over debt trading.
On Tuesday, UBS said it will maintain its plans for cost cutting and reduce exposure to risky assets. Since the overhaul that began in mid-2011, the bank said it had achieved 1.4bn francs in net cost savings, resulting for a possible 50 per cent increase in dividend payout for 2012 to 0.15 francs per share.