Swiss bank UBS AG told investors yesterday it aimed to make an annual pretax profit of 15 billion Swiss francs (US$14.9 billion) in three to five years.
Plagued by continued quarterly losses and customer withdrawals, the bank set out a series of medium-term goals aimed at returning the one-time financial powerhouse to profit even as it indicated there would be no quick turnaround.
“We have made tremendous progress in increasing our capital and positioning the group for renewed growth, but work remains to be done,” chief executive Oswald Gruebel said in a note to investors.
“The transformation we are undertaking is a fundamental one and it will not happen quickly,” he said. “I am determined, however, that we build a firm for sustainable profit and not one to focus only on short-term expectations.”
UBS is targeting a cost-to-income ratio of between 65 percent and 70 percent and a return on equity of between 15 percent and 20 percent by 2015.
The bank reported a third-quarter net loss of SF564 million earlier this month, the second under Gruebel who was hired in March to turn UBS around after a record SF21 billion loss last year.
In a reference to the bank’s past practice of helping rich foreigners evade taxes that resulted in a high-profile legal dispute with the US government, Gruebel said he was building “a new UBS: one that performs to the highest standards and behaves with integrity and honesty.”
Tax amnesties such as in Italy would have a lesser impact than external observers predicted, the bank said.
UBS believes much of the money withdrawn from Switzerland will be reinvested with the bank’s foreign branches, while those customers who leave for good will be balanced out by new clients in emerging markets.
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