Boosted by a fourth-quarter net profit of CHF1bn, UBS Group’s net profit for 2014 increased 13% year on year to CHF3.6bn, the Swiss bank has revealed in its 2014 results. Profit before tax for the year was CHF2.9bn on an adjusted basis and CHF2.6bn on a reported basis.

Transaction-based income declined by CHF43m to CHF436m, largely in Asia Pacific, with the overall decrease mainly related to structured products, investment funds and fixed income, partly offset by higher income from foreign-exchange trading, stated the bank.

Non-core balance sheet assets decreased by CHF4bn to CHF151bn during the fourth quarter, mainly due to CHF3bn of lower positive replacement values (PRVs) from the bank’s over-the-counter (OTC) rates and credit derivative exposures that make up the majority of its remaining non-core portfolios.

The bank’s funded assets decreased by CHF1bn compared with the third quarter to CHF3bn, with remaining funded assets largely consisting of corporate loans, bonds held to hedge OTC derivative positions and collateral held for structured note issuance.

The bank also reported an internal investigation in relation to foreign exchange-related regulatory matters affecting its structured products. “Following an initial media report in 2013 of widespread irregularities in the foreign exchange markets, UBS immediately commenced an internal review of its foreign exchange business, which includes our precious metals and related structured products businesses,” stated the bank. UBS was the second-most active provider globally of tranche-based structured products, with 3,554 products marketed across all jurisdictions and €4.9bn of sales, according to the SRP database. The Swiss bank was also the top issuer globally in 2014, with over 170,000 products including non-retail, leverage and flow products worth over €8.1bn in sales.

Year to date, UBS leads the issuance tables with over 49,000 products including non-retail, leverage and flow, and €1.4bn in sales.

In wealth management, UBS reported that recurring net fee income increased by CHF8m to CHF986m, reflecting an increase in invested assets and continued growth in discretionary and advisory mandates, partly offset by the negative effect on the gross margin of ongoing outflows of assets from cross-border clients.

Wealth management adjusted profit before tax increased by 4% to CHF2.5bn with net inflows of CHF34.4bn. The Swiss bank also reported that its wealth management Americas unit achieved record adjusted profit before tax of over $1bn on net inflows of $10bn.

Retail and corporate adjusted profit before tax was also up by 4% to CHF1.6bn, while global asset management delivered a CHF500m profit before tax on CHF22.6bn of net new money excluding money market flows.

UBS’s investment bank also recorded a CHF300m adjusted profit before tax, reflecting the bank’s management of industry-wide legal and regulatory issues which required “operating within tight resource limits”. The bank’s corporate client solutions business’s revenues were up by 8%.

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