(MENAFN- Gulf Times) UBS Group has warned about the impact on profit of the surging Swiss franc and negative interest rates, while also disclosing another tax investigation in the US involving wealthy clients.
Shares in UBS slid more than 4% to 15.42 francs by 1225 GMT, despite the bank trebling its dividend from the previous year and saying it had made a solid start to 2015.
Switzerland's biggest bank said a sudden move by the Swiss central bank to abandon a cap on the franc, which sent the currency surging and is set to make life difficult for Swiss financial firms and exporters, will take a toll.
"The increased value of the Swiss franc relative to other currencies, especially the US dollar and the euro, and negative interest rates in the eurozone and Switzerland will put pressure on our profitability and, if they persist, on some of our targeted performance levels," it said.
The bank said net profit for the fourth quarter of 2014 was 963mn Swiss francs ($1.04bn), exceeding the 937mn francs analysts had forecast.
The profits led to what several analysts identified as a rare bright spot-a 0.75 franc per share dividend in two separate payouts, three times more than the 2013 payout of 0.25 francs a share.
UBS said it faced a new investigation into the selling of certain securities that potentially violate tax law in the US. It said it was cooperating with the US authorities after it was approached last month but gave no further details.
UBS was hit by a bill last year of more than $1bn to settle past scandals.
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