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UBS thrives on tax bonus

October 28, 2014

A deferred tax windfall has helped Switzerland's biggest lender offset the costs of legal action over penalties. The bank secured a decent third-quarter profit as it kept refocusing on wealth management.

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Image: picture-alliance/dpa

UBS reported a 32-percent year-on-year net profit rise in the third quarter. The Swiss lender said Tuesday bottom-line earnings totaled 762 million francs (632 million euros, $802 million).

It acknowledged the leap from 2013 levels was fuelled by a windfall of 1.3 billion francs in revised tax credits.

"I am very pleased with our underlying performance for the quarter, which again demonstrates the strength of our franchise," Chief Executive Sergio Ermotti said in a statement. "At the same time, we're actively addressing litigation and regulatory matters."

Costly matters

Authorities in several countries have been investigating UBS for allegedly helping clients to evade taxes back home. The bank also faces probes into the possible manipulation of foreign exchange markets.

The lender said Tuesday its provisions for litigation reached 1.8 billion francs during the third quarter, with the bulk of it pinned on the investment banking division.

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UBS noted it was pushing its operations in the wealth management segment, a division which turned a pre-tax operating profit of 707 million francs between July and September.

hg/cjc (dpa, Reuters)