LIBOR settlements

On 19 December 2012, the UBS Board of Directors authorized settlements of LIBOR-related claims with US and UK authorities; Swiss regulator to issue order

  • UBS agrees to pay approximately CHF 1.4 billion1 in fines and disgorgement to US, UK and Swiss authorities to resolve LIBOR-related investigations.
  • As part of a proposed agreement with the US Department of Justice (DoJ), UBS Securities Japan Co. Ltd. (UBSSJ) has agreed to enter a plea to one count of wire fraud relating to the manipulation of certain benchmark interest rates, including Yen LIBOR.
  • UBS is making progress in risk-weighted assets (RWA) reduction in the fourth quarter and expects its fully applied Basel III common equity tier 1 ratio to be roughly in line with the third quarter's level of 9.3%2 and net new money in UBS’s wealth management businesses is expected to be positive. UBS believes its fourth quarter net profit attributable to shareholders will show a loss, primarily as a result of provisions for litigation and regulatory matters.
  • UBS has been proactive in improving its processes and procedures in order to ensure that the misconduct identified in its core markets does not occur again.

UBS AG

1 Based on currency rates as of 6pm Zürich time on 18 December 2012.

2 The calculation of our pro-forma Basel III RWA combines existing Basel 2.5 RWA, a revised treatment for low-rated securitization exposures which are no longer deducted from capital but are risk-weighted at 1250%, and new model-based capital charges. Some of these new models still require regulatory approval and therefore our pro-forma calculations include estimates (discussed with our primary regulator) of the effect of these new capital charges which will be refined as models and the associated systems are enhanced.