ZURICH (Dow Jones)–UBS AG (UBS) Tuesday reported its first net profit in five quarters, but continued to suffer heavy withdrawals from wealthy clients, showing that the Swiss bank has yet to regain trust it lost during the financial crisis and from a bruising battle with U.S. tax authorities.
ZURICH (Dow Jones)–UBS AG (UBS) Tuesday reported its first net profit in five quarters, but continued to suffer heavy withdrawals from wealthy clients, showing that the Swiss bank has yet to regain trust it lost during the financial crisis and from a bruising battle with U.S. tax authorities.
UBS, based in Zurich, said it swung to a net profit of 1.21 billion Swiss francs ($1.13 billion) in the quarter ended Dec. 31, from a CHF9.56 billion net loss a year earlier, above the CHF426 million expected on average by analysts polled by Dow Jones Newswires.
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The result was bolstered by a CHF480 million U.S. tax credit, lower costs and fewer own credit charges.
In its outlook, UBS voiced confidence that measures being taken to stanch outflows–a main priority–will work, but that withdrawals will continue in the immediate future, as well as “some pressure on margins.”
Outflows of funds from wealthy UBS clients mounted to CHF33.2 billion from CHF16.8 billion in the third quarter. UBS’ asset management and U.S.-based brokerage arms also bled assets during the fourth quarter.
Besides the U.S. pressure, private banks such as UBS face outflows because of an Italian tax amnesty, which aims to lure funds from wealthy citizens back to Italy. Swiss private banks have long done brisk business with so-called offshore banking, particularly from neighboring countries.
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