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Bank fines overshadow earnings

Friday, October 28, 2016 - 01:55

Third quarter results at both UBS and RBS are overshadowed by misconduct and restructuring charges, while France's BNP Paribas gets a boost from a bond trading boom. Ciara Lee reports.

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There may have been profits but third quarter earnings at UBS have been overshadowed by misconduct and restructuing charges. Despite posting an 11 percent rise in the third quarter, the Swiss bank increased reserves for penalties related to mortgage-backed securities to over 1.4 billion dollars. Last month the U.S. Department of Justice demanded a 14 billion dollar fine from Deutsche Bank in a similar investigation. It's prompted fears UBS could face a stiffer penalty. UBS maintained its gloomy outlook amid economic uncertainty and low interest rates in Switzerland. SOUNDBITE (English) CITY INDEX MARKET ANALYST, KEN ODELUGA, SAYING "Swiss banking traditions have changed radically. That accounts for a lot. So they are not only having to ramp up to meet the demands of the new regulatory environment domestically. They are also trying to do it of course internationally. Namely of course in the U.S. I should say. That is very costly." Awaiting charges led to a third quarter loss at Britain's Royal Bank of Scotland, casting fresh doubts over when the government will recoup its 2008 bailout money. Still more than 70 percent owned by the British taxpayer, RBS reported a loss of 469 million pounds - more than double analysts expectations. RBS is waiting for what is likely to be the biggest regulatory penalty in its history for its role in mis-selling U.S. mortgage bonds. SOUNDBITE (English) CITY INDEX MARKET ANALYST, KEN ODELUGA, SAYING "They need to get through this. Basically all of their share prices won't be becalmed until we have clarity on the litigation front and what the settlement's going to be." Good times for France's biggest bank BNP Paribas though. Boosted by strong revenue at its investment banking division, the bank increased its capital buffer. BNP Parinas net income rose 3.3 percent in the third quarter.

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Bank fines overshadow earnings

Friday, October 28, 2016 - 01:55