The Swiss bank announced that net profit rose to SFr9.844 billion (Â£4.3 billion) during 2005, while attributable profit soared to SFr14.029 billion (Â£6.2 billion), boosted by the sale of three banks and an asset manager.
The latest UBS figures are well in excess of market expectations, driven by strong client inflows, strengthening financial markets and higher fees for private investors.
UBS stated that it was planning to return SFr3.80 per share to shareholders in April this year, accounting for part of the cash generated by the sale of businesses during 2005. The bank also stated that it intended to buyback up to five billion francs (Â£2.2 billion) worth of shares.
The largest wealth manager in the world revealed that total new money for the private bank in 2005 was up by 80 per cent on 2004.
UBS chief executive, Peter Wuffli, commented: "As in 2004, we have achieved another record level of profit. Although markets clearly helped us last year, we believe the result also reflects the sustainable earnings power of UBS, based on our client-centric strategy of business focus and growth."