Swiss bank UBS on Tuesday posted a narrow gain during its fourth-quarter profit after a remarkable tax benefit assisted in grabbing profits along with the sharply reduced amount of money which is set aside in order to deal with the bank’s continuing regulatory and legal issues.
Zurich-based bank said that its net profit in the fourth quarter increased to 963 million Swiss francs (or USD 1.04 billion) from the previous 917 million francs in the same period in 2014.
UBS declined 3.2 percent after it warned on the adverse impact of the negative interest rates in Switzerland as well as the euro zone and the increasing Swiss franc. The drop in the shares of the Swiss bank came despite it wowed for its biggest payout to the shareholders since the financial crunch and announcing a promising start to this year.
For the fourth quarter, the bank recorded 493 million francs as its net tax benefit, which is higher than the expectations of some analysts, who had expected a net profit of 792 million francs for the quarter.
The European shares on Tuesday dropped for a second day, with the stocks related to energy sector hurting the most due to the further sliding of crude prices on growing concerns over oil demand in China.
Peter Dixon, equity strategist at Commerzbank, said, “It’s difficult to see a big recovery in crude prices in the near term as the upside is limited in the current environment because of the huge supply glut. The oil shares would continue to mirror moves in energy prices.”
On the other front, the STOXX Europe 600 Oil and Gas index tumbled 1.5 percent after Brent dropped below USD 58 per barrel amid the rising concerns over the oil demand in China, the world’s second-largest economy, due to the Chinese inflation data.
The Swiss bank also cautioned against the rising value of the franc, saying if the increasing trend persists it could “put pressure on our profitability as well as the performance targets”.