UBS draws line under 2008 state bailout with toxic fund buyback

City A.M. Reporter
UBS SAID yesterday it will buy back a fund set up to purge the Swiss bank of toxic assets, drawing a line under a humiliating state bailout in 2008 and raising the prospect of an early increase in dividends.

Switzerland’s largest bank by assets has overhauled itself following the financial crisis and a series of high-profile scandals. The bank has abandoned risky fixed-income activities, hived off loans and raised capital to restore its reputation.

“The results show that our strategy is right and we’re ahead on execution,” UBS chief executive Sergio Ermotti said.

The stock hit a two-year high last week after a quarterly profit that beat forecasts, even after paying $885m (£577m) to settle a lawsuit with the US housing regulator over the mis-selling of mortgage-backed bonds.

As part of its restructuring, it has cut spending by SFr1.8bn (£1.3bn). It is aiming to axe SFr5.4bn by 2015.