2014.02.0523:45:18UTC+00UBS regain profit after hefty loss

UBS AG swung sprucely to profit in the 4th quarter, as the Switzerland's largest bank drives ahead with a bid to run in trimmed-down form.

The Zurich-based bank, which was severely affected by the financial crisis six years ago and has battled to form its scandal-prone investment bank into a reliable supplement to its flagship wealth management business, said the results mirrored the flexibility of the new model.

UBS has been ditching assets, cutting its balance sheet and containing riskier or more exotic trades at its investment bank, as it aims for a capital-light model.

It posted 4th quarter net profit of 917 million francs or $1 billion, as compared to a loss of almost 1.9 billion francs a last year. The bank's core wealth management business gained net new money of 5.8 billion francs, more than double the amount in the same period last year.

UBS's investment bank swerve to a pretax operating profit of 297 million francs, as compared to 243 million francs loss last year. The investment bank listed 62 billion francs in risk-weighted assets, below its self-imposed limit of 70 billion francs for the company.

In October, UBS offered investors an unpleasant surprise by revealing it had been smashed with a mandatory addition to its balance sheet from Switzerland's financial regulator. The bank said the regulator, Finma, mandated the bank to store some 28 billion francs in operational risk-related assets to safeguard it from unknown future litigation.

The mandatory prodded the bank to tell investors it would likely no longer be able to attain its goal of 15% return on equity by 2015. But on Tuesday, UBS said after a subsequent review by Finma, the obligation has been reduced by around 5 billion francs.