Daily Management Review

UBS profit halves due to litigation in the U.S.


According to statistics from the corporation, UBS's net profit for the first quarter was $1.03 billion, a 52% decrease from the same time previous year. As a result, the bank's stock declined by nearly 4% at the start of trading on the Swiss exchange.

An American lawsuit from 2018 was the primary factor in the bank's revenues falling by such a large amount. Then, UBS was sued by American authorities who alleged fraud in the bank.

Authorities claim that UBS misled investors who purchased securities backed by inappropriate mortgages on the verge of the 2008 financial crisis by not fully disclosing all the risks. These securities were sold by the bank for a total of $41 billion.

In contrast to many other banks, UBS opted to use the legal system to establish its innocence rather than hand over $2 billion to American authorities as part of the case. The bank has now put aside $665 million to pay for the costs of the legal defense in the trial.

source: bloomberg.com