UBS says US deal set over risky mortgages

NEW YORK — UBS, the Swiss banking giant, said on Monday it had reached an agreement in principle with a US regulator to settle claims related to mortgage-backed securities issued between 2004 and 2007.

The Federal Housing Finance Agency sued UBS and 17 other big banks in 2011, accusing them of misrepresenting the quality of mortgage securities they assembled and sold at the height of the housing bubble and seeking billions of dollars in compensation. UBS was the first, and the agency said it owned $4.5 billion worth of mortgages, with losses totaling $900 million.

While not disclosing the amount of the proposed settlement, UBS said in a statement that it was booking about $919 million of pretax charges related to the settlement and a tax agreement between Switzerland and Britain.


UBS is booking about $747 million in charges at the business that focuses on its portfolio of noncore and legacy assets and about $107 million in its wealth management division related to the tax agreement, which requires banks to collect taxes on accounts of British citizens.

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The full cost of the settlement will be covered by previous provisions and those taken in the second quarter, UBS said.

Separately on Monday, UBS posted preliminary results for its second quarter, reporting that profit rose to about $737 million from $454 million in the period a year earlier.

The company is scheduled to report full results on July 30.