UBS AG Posts 4Q Losses, BAML Analysts Not Deterred

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UBS AG Posts 4Q Losses, BAML Analysts Not Deterred
By twicepix (http://www.flickr.com/photos/twicepix/3295459278) [CC BY-SA 2.0], via Wikimedia Commons

UBS AG (NYSE:UBS) has just released its latest earnings report, posting quarterly losses for the second quarter in a row. The bank attributed the losses to the fine it had to pay for rigging Libor rates and costs associated with the 10,000 job cuts the bank is rolling out over the next three years. Shares of UBS AG (NYSE:UBS) were largely unaffected on the New York Stock Exchange, trading mostly flat in Tuesday’s morning activity.

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UBS AG Posts 4Q Losses, BAML Analysts Not Deterred

The bank posted fourth quarter losses of $2.08 billion, which was still a little ahead of Bloomberg’s consensus of $2.38 billion in losses. The bank’s full year losses amounted to $2.76 billion.

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UBS AG’s (NYSE:UBS) wealth management division outside the Americas dropped 13 percent during the fourth quarter due to higher costs. However the Americas wealth management division posted a 38 percent increase in pretax profits.

UBS AG (NYSE:UBS) has also announced it will buy back some outstanding bonds through the use of public tender offers. The tender offer period for euro and Italian lira securities is Feb. 19, and the period for the U.S. dollar dominated securities ends March 5.

Analysts at Bank of America Merrill Lynch released a report to investors this morning after the bank posted its latest earnings report.  They said even though the bank posted some disappointments in the report, that is “not enough to derail [the] restructuring story.”

They don’t believe the bank’s shareholders own the stock because of its near-term earnings reports. The analysts said they see UBS AG investors looking toward long-term growth as the bank restructures. They also “take comfort” in UBS’ capital and liquidity ratios, which give it room to make changes if it needs to do so during the restructuring process.

BAML analysts have reiterated their Buy rating and $16.77 price objective on shares of UBS AG (NYSE:UBS), saying they see “significant upside potential” in the stock.

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Michelle Jones is editor-in-chief for ValueWalk.com and has been with the site since 2012. Previously, she was a television news producer for eight years. She produced the morning news programs for the NBC affiliates in Evansville, Indiana and Huntsville, Alabama and spent a short time at the CBS affiliate in Huntsville. She has experience as a writer and public relations expert for a wide variety of businesses. Email her at Mjones@wordpress-785388-2679526.cloudwaysapps.com.
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