UBS earnings jump 53%

GENEVA: Switzerland’s largest bank UBS has posted a 53 percent rise in second quarter profits, in its first results since agreeing to plead guilty to fraud as part of the Libor manipulation case.
The bank brought in profits of 1.2 billion Swiss francs ($1.25 billion, 1.1 billion euros), with strong performances from its wealth management, corporate and investments units.
The bank said it had showed “resilience” in the face of economic uncertainty and rising costs caused by a strong Swiss franc, among other headwinds.
“I am pleased with the quarter. We maintained our momentum despite ongoing market challenges,” CEO Sergio Ermotti said in a statement.
The US department of Justice in May dropped charges against UBS as part of a probe into currency rigging, granting it conditional immunity for cooperating with authorities.
But as part of its deal with US officials, a 2012 non-prosecution agreement in connection with Libor interest rate manipulation was revoked.
UBS agreed to plead guilty to one count of wire fraud in the Libor affair, pay $203 million in fines and accept a three-year probation.
Both UBS and analysts had predicted that the fines would not have a meaningful impact on second quarter results.
UBS had been fined the equivalent of $1.5 billion in 2012 by US, British and Swiss regulators for its role in the massive misconduct in the setting of the Libor rate, a global reference that affects products from student loans to mortgages.
Executives at the bank have blamed the misconduct in the Libor matter on an isolated number of employees.
Concerning the rigging of the foreign exchange market, six major global banks have been fined a total of almost $6 billion.
The Swiss bank on Monday said that as of June 30 it had 2.4 billion Swiss francs set aside as provisions to cover future litigation costs, down from just over 2.7 billion Swiss francs at the end of March.
But its wealth management unit in the America’s has been negatively impacted by higher litigation provisions, the bank added.
But in a sign that the bank was moving past its legal and regulatory troubles, UBS said its wealth management division posted its best second quarter results since 2009, with a pre-tax profit of 769 million Swiss francs.