UBS reported a full-year group loss of CHF2.5bn ($2.7bn) while its wealth management unit posted net new money up CHF11.3bn for 2012 to CHF46.9bn ($51.5bn).
Switzerland’s largest bank by assets suffered substantial losses due to the $1.5bn fine imposed by regulators in the US, UK and Switzerland relating to Libor rate manipulation.
In its fourth quarter alone, the bank registered a CHF1.8bn ($1.9bn) net loss compared with a CHF323m ($354m) profit in 2011.
Combined wealth management businesses’ pre-tax profit was of CHF 2.9bn ($3.1bn).
UBS’s Wealth Management Americas achieved record full year pre-tax profit up by 40% to $873m while net new money increased by $8bn to $22.1bn.
Of the full year invested assets, CHF821bn were attributable to wealth management; CHF772bn were attributable to wealth management Americas.
Refocus on private banking
The bank revealed last year its intention to heavily refocus on the private banking sector to be more stable and sustainable.
"We made decisive progress in executing our strategy last year and started 2013 in a strong position. Our financial strength, our attractive and unique business mix and our enviable global client franchise allow us to restore client confidence while we execute our strategy and address challenges of the past," says Group CEO Sergio Ermotti.
42% cut on bonuses
UBS also implemented a new compensation framework to encourage longer-term performances by reducing the bonus pot for 2012 by 7% compared with 2011 to CHF2.5bn, 42% below the 2010 level.
The changes include longer deferral periods, multi-year performance conditions on equity-based deferred compensation, a new loss-absorbing high-trigger deferred capital instrument and a reduction in the maximum initial cash payment that an employee may receive as part of a performance award.
The new compensation model is aimed to better align employee and shareholder interests and to respond to public criticism, making the system more transparent, the bank said.