UBS Talks with U.S Justice Department on FX Market Manipulation “Advanced”

Switzerland's biggest bank revealed that, despite the talks, still "no agreement has been reached with the DOJ on the form

Zurich-based global banking giant UBS has announced today strong quarterly figure and revealed that its discussions with the American Justice Department (DOJ) are in an “advanced” stage.

The talks between UBS and the DOJ were focused on the forex manipulation scandal that keeps haunting the big global banks. Following several years of FX rate-fixing and market-manipulation allegations involving the world’s major banks, a scandal erupted and last year alone resulted in six major banks paying over $3 billion in fines.

“Discussions with DOJ have continued and are at an advanced stage, although no agreement has been reached with the DOJ on the form of a resolution,” Zurich said in its quarterly report published on Tuesday.

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In regards to earnings, UBS reported net profit for the first quarter of 2015 reached 1.977 billion Swiss francs ($2.1 billion), an 88% Year-on-Year jump in first-quarter net profit.

Sergio Ermotti, UBS Chief Executive Officer, commented: “I’m pleased with the strong quarter. We stayed close to our clients, we stayed disciplined on risk and we delivered across all businesses and regions. The results again demonstrate the benefits of a strategy defined early and executed with a focus on long-term value creation.”

This is indeed a strong quarter for UBS but future DOJ fines might derail the bank’s success if they are just as strong. Just last week, RBS reported a massive loss in the first quarter of 2015, even more so than pessimistic analysts estimated. The bank’s losses emanated from its penalties for the global forex manipulation scandal and RBS was forced to set aside additional capital for further forex probes.

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