UBS says it won't reach 2015 profitability goal

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UBS, said it probably won’t be able to reach its profitability goal in 2015 after the Swiss regulator demanded the company hold more capital for risks related to litigation.

Bloomberg reports that the bank’s ambition to reach its 15% return on equity target in 2015 will be delayed by at least a year unless the regulator removes its demand, the bank said in a statement Tuesday.

'There is no single item that we can point to that brought this decision', CEO Sergio Ermotti said in an interview with Bloomberg Television, referring to the order to increase capital for operational risks. 'It’s a variety of reasons and it’s a temporary measure. We will work hard to take this add-on away'.

UBS reported third-quarter net income of $644m compared with the $624.8m average estimate of 12 analysts surveyed by Bloomberg. A $247.3m tax benefit helped cushion $652.7m in provisions for litigation and regulatory matters. UBS said today it has received requests for information from various authorities investigating foreign exchange matters.

The Swiss regulator’s demand for more capital is a setback for Ermotti, who decided to exit most debt-trading businesses at the investment bank last year to boost returns. The bank, which paid about $3.34bn in fines and settlements for litigation in the past year, said it expects 'elevated charges' for legal and regulatory matters through 2014.

To access the complete Bloomberg article hit the link below

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