UBS shares slide despite soaring profits for 2015

Swiss banking giant UBS on Tuesday posted a 79-percent higher net profit for 2015, beating analyst expectations, with tax benefits offsetting a difficult fourth quarter hit by market turmoil.

UBS shares slide despite soaring profits for 2015
Photo: AFP

Last year, Switzerland's largest bank raked in a net profit of 6.2 billion francs ($6.1 billion), it said in its earning statement.
“Despite a very challenging environment, we had an excellent year,” UBS chief Sergio Ermotti said in the statement.
Investors were not convinced.

After UBS released its results, it saw its share price shrink more than seven percent to 15.50 francs a piece as the Swiss
stock exchange's main SMI index dipped 1.5 percent.
The bank acknowledged that its “fourth quarter was characterized by very low levels of client activity and pronounced risk aversion.”
But thanks to a hefty net tax benefit, UBS still easily outperformed expectations.
For the October to December quarter, the bank posted a net profit of 949 million francs, up from 858 million a year earlier.
Analysts polled by the AWP financial news agency had expected UBS to post a net profit of 626 million francs for the quarter.
UBS said its fourth quarter result included a net tax benefit of 715 million francs, mainly linked to an “upward revaluation of deferred tax assets”, counterbalanced by 365 million francs in provisions for litigation and regulatory matters.
The quarter also included a charge of 257 million francs linked to a debt buyback programme.
UBS's vital wealth management division meanwhile saw its adjusted profit before tax swell 13 percent in 2015 to 2.8 billion francs — its best result since 2008.
And it pulled in 22.8 billion in new money under its management during the year.
But during the final quarter of the year, the division saw its operating profit plunge 47 percent to 344 billion francs “amid very low levels of client activity,” UBS said.
And during the quarter, net new money outflows ticked in at 3.4 billion francs as clients, especially in emerging markets and Europe, liquidated their positions to reduce debt, more than offsetting continued inflows from the Asia Pacific region and Switzerland.
The US wealth management division, which is counted separately, had an even rougher quarter, seeing its operating profit plunge 94 percent to just $13 billion amid “substantial charges for litigation, regulatory and similar matters”.
The investment bank division meanwhile posted a 1.8-billion-franc profit for the year, but was slammed in the fourth quarter by the global market slowdown, seeing its operating profit slump 63 percent to 80 million francs.
Looking forward, the bank acknowledged that the macroeconomic challenges it has been facing were “unlikely to be resolved in the foreseeable future.”
“Negative market performance and substantial market volatility since the start of 2016, low interest rates, and the relative strength of the Swiss franc, particularly against the euro, continue to present headwinds,” UBS said.
The bank said it aimed to pay a 2015 dividend to shareholders of 0.60 francs per ordinary share and a special dividend of 0.25 francs.

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How to avoid the most common online scams in Switzerland

Swiss authorities are warning the public against the most common current online, telephone and postal scams and issuing useful advice on how to avoid these shady schemes.

How to avoid the most common online scams in Switzerland
Beware of scams circulating in Switzerland. Photo by Greg Baker / AFP

The number of attempts to extort money from unsuspecting individuals is on the rise in Switzerland, and the National Cyber Security Centre (NCSC), as well as other authorities, are advising the public to be vigilant of any scheme asking for bank account or credit card numbers.

These are some of the most common scams that should ring alarm bells:

Tax arrears

Geneva officials have alerted taxpayers not to fall victim to telephone scams where the callers identify themselves as employees of the cantonal tax office. The person is told that he or she owes money for unpaid taxes, and callers demand the number of the bank account to withdraw the amount owed.

In case the taxpayer refuses, fake employees threaten the victim with a 200,000-franc fine. If the person is elderly — often the most vulnerable victim — the scammers exert pressure by saying their social security payments will be suspended until payment is made.   

Geneva authorities urge the public to inform the police if they receive such a phone call.

READ MORE: Switzerland: Zug residents receive fake letters telling them to quarantine

Package delivery against payment

You may receive an email, supposedly from well-known parcel delivery services, notifying you that a package addressed to you will be delivered once payment is made.

The parcel notification email contains a link to a page asking for credit card details or to activate a service on the mobile phone by sending a text message.

IT support

A caller pretending to be an employee of Microsoft or another IT company tells you that your computer is infected with a virus and new software has to be installed.

The aim of these cyber-attackers is to trick you into downloading a program that will give them access to your computer. 

In most cases, the callers will also try to sell you software licence or another service by asking for your credit card information.

Competitions and prizes

You may get emails, allegedly from well-known Swiss retailers, promising you vouchers for expensive prizes. But in order to receive them, personal data such as credit card details, name, email address, and mobile phone number have to be entered on a fake website.

The fee is immediately charged to your credit card and, unbeknownst to you, you will take out an expensive long-term subscription to a product or service you may or may not get.

The list of all the current scams in Switzerland is here.

If you receive any of the above or similar messages by post, email or phone, the NCSC advises to:

  • Ignore these messages by hanging up the phone and / or deleting emails, moving them to the Spam folder
  • Never give out your credit card number or bank account information to people you don’t know
  • If you did give your card number, contact your credit card company immediately to have the card blocked. Likewise, if you gave out your banking details, get in touch with your bank.
  • In the event of financial loss, the NCSC recommends filing a criminal complaint with the cantonal prosecution authorities. You can search for police stations in your area and their telephone numbers on the Police website.

A good rule to remember is that if an offer or a deal sound too good to be true, or if threats and pressure are involved, they are more than likely scams.

READ MORE: Swiss public warned about fake emails sent from banks and police