Switzerland’s UBS sets aside $400m more for mortgage penalties
Swiss banking group has beefed up provision for any penalties it may face arising from mortgage-backed securities before the international financial crisis
Zurich — UBS revealed it set aside an extra $417m to cover possible penalties linked to irregularities in selling mortgage-backed securities ahead of the financial crisis as it delivered an 11% rise in third-quarter profit. The Swiss bank posted results on Friday showing increased provisions to cover a range of ongoing residential mortgage-backed securities (RMBS) legal sanctions to $1.405bn, from $988m previously. This follows news last month of US Department of Justice moves to fine Deutsche Bank $14bn after an RMBS probe. The department demanded far more than analysts expected, prompting fear that UBS, the world’s biggest wealth manager, could also face a stiffer penalty. But CE Sergio Ermotti said each case was different. "Every bank has its own legal position," he said. UBS told investors that Hong Kong’s regulator was investigating its role as sponsor of initial public offerings. If found guilty, it could face financial penalties and a temporary ban from providing corporate fi...
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