UBS Reaches Agreement in Principle to Settle Litigation with FHFA for RMBS Offerings between 2004 and 2007
UBS estimates that for the second quarter of 2013 its operating profit before tax was approximately CHF 1,020 million and its net profit attributable to shareholders was approximately CHF 690 million. Our Basel III common equity tier 1 ratio is expected to improve significantly to approximately 11.2% on a fully applied basis and 16.2% on a phase-in basis.
These results include pre-tax charges totaling approximately CHF 865 million for all litigation matters and certain other significant provisions and an impairment of financial assets; approximately CHF 700 million was booked in the Corporate Center – Non-Core and Legacy Portfolio and approximately CHF 100 million was booked in Wealth Management in relation to the Swiss-UK tax agreement. We will report strong net new money in our wealth management businesses with net inflows of approximately CHF 10.1 billion in Wealth Management and net inflows of CHF 2.7 billion in Wealth Management Americas, with net outflows of CHF 2.0 billion in Global Asset Management.
UBS has reached an agreement in principle with the Federal Housing Finance Agency (FHFA) to settle claims relating to US residential mortgage-backed securities (RMBS) offerings between 2004 and 2007. This case, which we have highlighted in our litigation note since the third quarter of 2011, is one of a group of cases related to RMBS offerings filed by the FHFA against 18 financial institutions. The settlement, which is subject to documentation and final approvals by the parties, would encompass pending RMBS-related litigation brought by the FHFA against UBS on behalf of Fannie Mae and Freddie Mac as well as certain unasserted claims. The full cost of the settlement is covered by litigation provisions established by UBS during the second quarter of 2013 and in prior periods.
Our full financial report for the second quarter of 2013 will be issued as scheduled on 30 July 2013.