UBS reports first profit in more than a year

UBS is trying to rebuild after heavy losses in the US sub-prime market

Swiss bank UBS has reported its first quarterly profit for more than a year, helped by lower costs and a large tax credit.

UBS made a pre-tax profit of 1.2bn Swiss francs ($1.1bn; £722.9m) in the three months to 31 December.

This compares with a loss of 9.58bn francs in the same period in 2008.

The turnaround in the final three months of the year helped the bank to cut its annual net loss to 2.7bn Swiss francs last year.

The bank's profit in the final quarter of 2009, which was much bigger than analysts had expected, was partly down to a tax credit worth 480m francs.

Cash withdrawals

In a letter to shareholders, chief executive Oswald Gruebel said he was confident that the bank's positive performance would continue.

"We have taken decisive action to transform UBS and it is now a focused, efficient and resilient firm," he said.

"We expect that our return to profitability will increase clients' confidence in UBS and restore our reputation."

However, the bank still suffered from outflows in the final three months of 2009, as clients took out 56.2bn francs.

Such withdrawals would continue "in the immediate future", the bank said.

UBS also said it was confident that its long-running dispute with US tax authorities would be resolved.

The US has accused UBS of hiding nearly $15bn in assets of US customers, and is seeking the account details of some of its US clients.