BERLIN (AP) - A strong performance from the investment bank division and a sizeable tax gain helped Switzerland's biggest bank, UBS AG, return to profit in the fourth quarter following a large loss a year earlier.
The bank said Tuesday it made a net profit of 917 million francs ($1 billion) in the October-December period following last year's equivalent loss of 1.9 billion francs when earnings were dragged down by litigation and restructuring costs.
As a result, the bank made a full-year profit of 3.17 billion francs compared with a loss of 2.48 billion francs in 2012.
The quarterly figures showed that the bank saw an increase in fee and commission income largely at its investment bank unit and reported a tax benefit of 470 million francs on deferred taxes.
The results were better than expected- the consensus in the markets was for a fourth-quarter net profit of 577 million francs and full-year earnings just short of 2.8 billion francs.
As a result, the bank bucked the broader stock market trend and UBS shares rose 3.6 percent to 18.07 francs in Zurich trading.
Because of its strong performance, UBS hiked its annual dividend 67 percent to 0.25 francs per share.
Overall, last year's results may mark a turning point for a bank that in 2012 had to pay fines for allegedly manipulating, along with other banks, a key market interest rate known as LIBOR.
UBS and 17 other financial firms were also sued by the U.S. government for selling some $196 billion worth of mortgage-backed securities to housing financing agencies Fannie Mae and Freddie Mac.
For last year's fourth quarter, UBS reported 79 million francs in provisions for litigation and regulatory expenses- far below the 2.08 billion francs it set aside a year earlier. Full-year provisions declined to 1.7 billion francs from 2.55 billion francs in 2012.
Still, chief financial officer Tom Naratil cautioned in a conference call with reporters and analysts that UBS still expects charges related to regulatory issues and other claims "to remain at elevated levels through 2014."
For this year, UBS said uncertainty over global growth, fragility in emerging markets and unresolved issues in Europe and the U.S. "make improvements in prevailing market conditions unlikely."
However, it said that "despite possible headwinds, we expect that our wealth management businesses will continue to attract net new money."
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