Swiss bank UBS has announced it will take a SFr 2.9bn write-down related to US tax law changes, while revealing it is creating a "unified global wealth management division" and is upping its dividend.
Revealing its fourth-quarter results for last year, UBS reported a rise in pre-tax profits of 32 per cent to SFr 5.4bn for 2017, higher than analyst expectations.
It has proposed a dividend of SFr 0.65 per share, up eight per cent, and is kicking off a three-year share buyback programme of up to SFr 2bn with up to SFr 550m in 2018.
However, it did confirm it was impacted to the tune of SFr 2.9bn in write-offs because of US tax changes.
UBS said it expects the improved investor confidence and macroeconomic developments it picked up on in 2017, to "continue to benefit" its global wealth management businesses.
It added that low market volatility looks set to persist in the short term, "affecting institutional client activity levels in particular".
Why it's interesting
As well as reporting solid growth at its core international wealth management business, UBS said it will be merging that with its American wealth management business from 1 February.
The new arm will have two co-presidents, Martin Blessing who currently heads up the wealth management unit, and Tom Naratil, president of UBS Americas.
UBS boss Sergio Ermotti said the bank's wealth management businesses have been transformed over the past few years, and today's announcement "reflects our continued evolution" in aligning them.
"It will mean improved efficiency, more sharing of best practices, greater returns on our investments and enhanced client service," he said.
UBS also said it's expecting geopolitical factors to continue remaining a risk, but said it is well-positioned to deal with the challenges and to mitigate their impact on overall performance and profitability.
What the company said
Sergio Ermotti, UBS chief executive, said:
2017 was an excellent year for us. We delivered stronger financial results and met our net cost reduction target.
Greater regulatory clarity means we can open a new chapter for UBS, allowing us to sharpen our focus on growth across our businesses, make further investments in technology and deliver attractive returns to shareholders.
Read more: "Shun bitcoin, bite at blockchain" says UBS