GENEVA (AP) — Swiss bank UBS reported a 22-percent drop in net income in the fourth quarter last year, due in part to tax effects, but said Friday that rising investor confidence in the United States could boost its wealth management business.
Citing "very challenging" market conditions in 2016, the bank reported net income of 738 million Swiss francs ($736 million) in the fourth quarter, compared with 949 million a year earlier.
UBS also recorded more than 1 billion francs in negative income due to cash-flow hedges, citing a drop in unrealized gains from hedging derivatives as long-term interest rates increased.
Pre-tax operating profit jumped to 848 million francs, up from 234 million a year earlier.
UBS said macroeconomic uncertainty, geopolitical tensions and "divisive politics" continue to affect the mood of clients and transaction volumes, but that it had noticed improved investor confidence, mainly in the United States, "which may benefit our wealth management businesses."
The bank said it achieved 1.6 billion francs of annualized net cost savings in 2016, up from 1.1 billion a year earlier, and is on track to reach a 2.1 billion-franc target by the end of this year.
For the full year, net income plunged to 3.3 billion francs, from 6.2 billion in 2015.
This story has been corrected to say "pre-tax operating profit" rather than "net operating profit."