LONDON â€" UBS, the giant Swiss bank, said on Tuesday that it has received requests for information from regulators in Switzerland, the United States and elsewhere related to its foreign exchange business and is cooperating with those investigations.
The bank said in its quarterly earnings report that it has launched an internal review of the business following a media report in June of “widespread irregularities in the foreign exchange markets.â€
“We have taken and will take appropriate action with respect to certain personnel as a result of our review, which is ongoing,†the bank said.
The revelation came as the bank announced that its profit rose to 577 million Swiss francs ($643.9 million) in the third quarter, but that its results continued to be dragged down by charges for litigation and regulatory concerns.
A year ago, the bank reported a loss of 2.13 billion Swiss francs ($2.38 billion) after it booked billions of dollars related to its debt and the restructuring of its investment bank. The bank cut 10,000 jobs last year as part of a major overhaul designed to shift its focus from more risky trading activity in its investment bank to its wealth management arm.
UBS, Switzerland’s largest bank, said that Swiss regulators have asked it to temporarily set aside an additional 28 billion Swiss francs beginning in the fourth quarter to account for potential litigation charges from risky assets. UBS has reduced its so-called risk-weighted assets by 80 billion Swiss francs, or 27 percent, since last year.
The bank said that it was taking a charge of 586 million Swiss francs in the third quarter to account for litigation and regulatory issues and expected elevated charges to continue through 2014.
In addition to the charges, the bank’s quarterly results were hurt by lower client activity and trading in its wealth management business in the Americas and a seasonal slowdown in its investment bank. UBS’s results beat Wall Street expectations of 537 million, according to analysts surveyed by Reuters.
“Our results this quarter provide more evidence that our business model works in a variety of market conditions,†said Sergio P. Ermotti, UBS’s chief executive. “One year into the acceleration of our strategy we are ahead of plan on execution.â€
UBS was one of the hardest-hit banks during the financial crisis, receiving a direct injection of 6 billion Swiss francs from the government in October 2008. However, the Swiss government sold its 9 percent stake in the bank for more than $1 billion nearly a year later.
In August, a fund set up as part of the bank’s bailout fully repaid a loan it received from the Swiss National Bank, paving the way for UBS to buy back a portfolio of distressed assets moved off its books as part of the rescue.
UBS said operating profit from its wealth management business declined slightly to 555 million Swiss francs from the second quarter. Operating profit declined 13 percent to 202 million in its Wealth Management Americas business quarter over quarter.
In the investment bank, operating profit fell 68 percent to 251 million Swiss francs from the second quarter. Operating profit rose 7 percent to 402 million Swiss francs in its Retail & Corporate business quarter over quarter.
The bank said its core Tier 1 capital ratio, a measure of a bank’s ability to weather financial disturbances, rose to 11.9 percent by the end of the third quarter under the industry regulations known as Basel III. The core capital level had been 9.8 percent in the prior-year quarter.
UBS continues to target a 13 percent Tier 1 ratio for 2014, but its target of a 15 percent ratio for 2015 is expected to be delayed by a year because of the litigation add-on charge required by Swiss regulators.
