GENEVA (AP) — Shares in Swiss banking giant UBS were sliding Tuesday after it posted a profit for the third quarter but warned that its earnings goals may be delayed due to the potential costs of settling legal cases.
The stock fell 6 percent to 18.03 Swiss francs in morning trading on the Zurich exchange. Switzerland's biggest bank said it had a third-quarter profit of 577 million Swiss francs ($644 million), a turnaround from the $2.1 billion-francs loss it had in the same period a year ago.
But the Zurich-based bank says it probably would not be able to achieve its profit goals for 2015 because of Swiss regulatory demands that it hold significantly more capital for risks from litigation.
Swiss financial regulator FINMA's demands this quarter were related to "known and unknown litigation," Chief Executive Sergio P. Ermotti told analysts and reporters. "There is no indication of a single item weighting that decision. It is based upon the portfolio."
UBS AG said in a statement Tuesday it had third-quarter charges of 586 million francs for litigation, regulatory and other related matters, and sees more regulatory challenges ahead.
"The operating environment in the third quarter remained challenging," it said. But the bank's declining operating income was partly offset by lower operating expenses and staff cuts, reducing the number of employees to 60,635 from 62,628 a year earlier.
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