UBS warns, doubles dividend

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UBS, the biggest Swiss bank, doubled its full-year dividend to mark its biggest payout since the credit crisis Tuesday, but warned the Swiss franc's strength could hit future profits.

Sergio Ermotti, chief executive of the Swiss bank, told CNBC that it had made a "solid start" to this year, but warned: "Volatility is staying with us for the foreseeable future."

"The increased value of the Swiss franc relative to other currencies, especially theUS dollar and the euro, and negative interest rates in the euro zone and Switzerland will put pressure on our profitability and, if they persist, on someof our targeted performance levels," the bank said in a statement.

The Swiss National Bank (SNB) stunned markets in January, when it scrapped its three-year-old peg of 1.20 Swiss francs per euro. Ermotti said there is no need for further action by the central bank. He added that the bank isn't planning to extend negative interest rates to its customers - which will increase pressure on profits.

UBS has raised its ordinary dividend for 2014 to 0.50 Swiss francs per share, double the previous year's payout, as profits for 2014 came in better-than-expected at 963 million Swiss francs ($1.0 billion). There will also be a one off supplementary dividend of 0.25 Swiss francs per share.

U.S. authorities are investigating the sale of securities which potentially violate U.S. tax law at UBS, the bank confirmed. These include so-called "bearer bonds".

The announcement comes at a time of increasing controversy over the actions of Swiss-based banks, with HSBC admitting failure at its Swiss subsidiary, after reports it helped wealthy customers dodge taxes and conceal assets.

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