UBS overhaul bearing fruit despite hefty quarterly loss
By Katharina Bart
ZURICH (Reuters) - Swiss bank UBS reported faster-than-expected progress in overhauling its investment bank but its flagship wealth management unit performed disappointingly, weighed down in Europe where Switzerland is under fire for helping tax cheats.
UBS announced a 1.89 billion Swiss franc ($2.08 billion) net loss for the fourth quarter on Tuesday following a big fine for rigging benchmark interest rates, although this was less than the 2.078 billion analysts had expected on average.
Switzerland's biggest bank also said it was cutting overall bonus payments to its staff, with the maximum individual payout halved to one million francs.
UBS announced plans in October to fire 10,000 staff as it returns to its private banking roots and ditches much of the trading business that lost $50 billion in the financial crisis and prompted the rate rigging fine.
"We are on track with the transformation of the Investment Bank," said UBS chief executive Sergio Ermotti.
UBS shares were volatile, trading down 0.8 percent at 1054 GMT, compared with a 1.1 percent firmer European banking sector index.
"Investors who buy UBS shares do so for the medium term transformation of UBS from a universal bank into a wealth manager, and the subsequent re-rating/capital return it should deliver," said Sarasin analyst Rainer Skierka. "UBS is on track to achieve its goals. This has also been underlined with a 50 percent increase in its dividend."
The dividend rose to 0.15 francs from 0.10 for 2011. Continued...