UBS commodities trading risk up in fourth quarter

LONDON Feb 8 (Reuters) - Commodities risk at UBS (UBSN.VX), Switzerland's biggest bank, rose for the second consecutive quarter after a series of declines, the bank said in its fourth quarter report released on Tuesday.

The bank's average value at risk (VaR) rose to 4 million Swiss francs ($4.2 million) in the fourth quarter from 3 million in the July-September period and was also up year-on-year.

VaR is a global measure for the maximum amount of money a bank could potentially lose in one day trading an asset class. At UBS, VaR is based on a 95 percent confidence level of accuracy.

Overall VaR for UBS rose to 66 billion Swiss francs in the fourth quarter from 58 million in the prior quarter.

All businesses at UBS improved in the quarter -- with total net new money of 7.1 billion Swiss francs -- after clients who had been rattled by massive writedowns pulled out nearly 400 billion francs in recent years. [ID:nLDE71625L]

Most banks pared their commodities risk this year to cope with tougher financial regulations although some have raised their exposure to seek a bigger market share.

Since the financial crisis calls for tougher financial oversight of Wall Street banks resulted in a number of new regulations culminating in the Volcker Rule passed in July.

The rule bars banks that operate in the United States from using more than 3 percent of their capital for trading on their account in partnerships and assets that include commodities. (Reporting by Patryk Wasilewski, editing by Anthony Barker)