UBS revises profit down after settling lawsuit, ups CEO pay

Fri Mar 13, 2015 1:55pm EDT
 
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By Joshua Franklin and Jonathan Stempel

ZURICH (Reuters) - UBS AG (UBSG.S: Quote) on Friday lowered its previously reported net profit for 2014 after reaching a $135 million settlement of litigation in which investors accused Switzerland's largest bank of colluding with rivals to rig the foreign exchange market.

In its annual report, UBS reduced its fourth-quarter profit by 105 million Swiss francs ($104 million) and boosted its litigation reserves to 3.05 billion Swiss francs ($3.03 billion).

"The principal change arose due to an increase in charges for provisions for litigation, regulatory and similar matters of 134 million francs," the Zurich-based bank said.

UBS is now reporting total 2014 net profit of 3.466 billion francs ($3.45 billion), down from 3.571 billion francs it reported in February.

The $135 million settlement resolves antitrust claims by hedge funds, pension funds and other investors that UBS impeded competition in the currency markets by conspiring to manipulate the WM/Reuters Closing Spot Rates, known as the Fix, in chat rooms, instant messages and emails.

JPMorgan Chase & Co (JPM.N: Quote), the largest U.S. bank, in January agreed to pay $99.5 million to settle.

Ten other banks were sued. Michael Hausfeld, a lawyer for the investors, said talks about future settlements were ongoing.

Switzerland's two biggest banks have now revised down fourth-quarter earnings.   Continued...

 
Workers are seen beside a logo of Swiss bank UBS in Zurich February 13, 2015.  REUTERS/Arnd Wiegmann