Feb 9, 2010, 14:42 GMT
Geneva - The Swiss banking giant UBS reported a 1.205 billion franc (1.12 billion dollars) profit Tuesday for the fourth quarter of 2009 - even as client money outflows continued.
UBS, which suffered massive losses and writedowns during the financial crisis, said the better than expected profit was in part due to lower costs amid an austerity plan and a tax credit.
Chief Financial Officer John Cryan told reporters on a conference call the tax credit was largely in the United States, owing to the group's overall position, which remained in the red.
The bank's net loss for 2009 was 2.7 billion francs, compared to a loss of over 21 billion in 2008.
The bank, which has been reporting losses since 2008, said that the increase in money outflows 'remains a main priority,' with management indicating that without the reputation of UBS being restored the issue would remain a problem.
UBS would need to be profitable and regain the trust of its customers to improve its position, the group's CEO Oswald Grubel told Swiss television.
Cryan said it was 'very difficult to gauge' when flows would be positive again.
Net outflows in fourth quarter 2009 totalled 33.2 billion at the wealth management division in Switzerland, 12 billion for wealth management in the Americas, and another 11 billion at the global assets sections.
The headcount of employees was reduced by 16 per cent, and the bank said it was in line with its goals - although analysts had predicted some money managers had taken clients and their assets with them.
Peter Thorne, an analyst at Helvea, called the direction of money the 'awful outflows.'
Segments of the outflows were attributed also to an Italian tax amnesty, which encouraged wealthy clients of Swiss banks to divulge information on their assets held in secret accounts.
UBS is also still entangled in a tax case in the US.
The bank has admitted its employees committed wrongdoings but is still awaiting a full resolution, with Washington pushing to receive more information on accounts of what it believes are tax evaders, as part of a deal reached last August.
Tier 1 capital ratio, a marker of financial health from a regulatory position, was 15.4 per cent, up slightly from the previous quarter.
The investment bank division was fairing better than it had in the past, with UBS reporting increases in revenues, and said it expected the division's 'performance for 2010 as a whole will improve.'
In part, the investment bank was expected to benefit from a reduction in risky assets over the last year, Cryan said, which had been weighing down the division.
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