UBS reports massive drop in profit

Switzerland's biggest bank UBS has reported a net profit of SFr393 million ($425 million) in the fourth quarter of 2011 in the wake of a $2-billion rogue trading scandal.

This content was published on February 7, 2012 - 08:06 and agencies

The net profit at the Zurich-based bank fell by 76 per cent from the same quarter in 2010 when net profits totaled SFr1.66 billion due to tax gains.

UBS says it foresees "headwinds" for growth and gains in early 2012 due to Europe's debt crisis and continued uncertainty about the global economic outlook.

Earnings were clearly below analysts’ estimates.

Chief executive officer Sergio Ermotti and chairman of the board, Kaspar Villiger, said the European crisis and the global economic outlook would most likely affect client activity in the first quarter of 2012 as well.

The bank, which has over 60,000 staff around the world and manages more than SFr2 trillion in assets, reported its results before markets opened in Zurich on Tuesday.

Swiss financial market authorities have begun enforcement proceedings against UBS over its massive rogue trading loss last year.

Such proceedings can result in regulators demanding changes in the way a bank operates and UBS has pledged to cooperate with the regulators.

Former UBS trader Kweku Adoboli was arrested in September on charges of committing fraud that cost the bank over $2 billion. He has pleaded not guilty to two counts of fraud and two counts of false accounting between 2008 and 2011.

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