Pre-tax losses at UBS Wealth Management Americas were SFr130 million ($141 million) last year, compared to a profit of SFr32 million in 2009, the Swiss banking giant said today, attributing the result to higher litigation provisions. Meanwhile, net new money outflows narrowed.

The Swiss bank said the performance of its US business belied “considerable progress made during the year, the benefits of which were more than offset by a significant increase in litigation provisions.”

Operating income was broadly flat at Wealth Management Americas, at SFr5.6 billion, while operating expenses rose 3 per cent to $5.7 billion, which included a restructuring charge of SFr162 million. Operating income did however increase by 4 per cent in US dollar terms.

Income was boosted by higher managed account and mutual fund fees, which were offset by a decrease in municipal trading income, the private bank said.

Net new money outflows narrowed last year at Wealth Management Americas to SFr6.1 billion, from SFr11.6 billion in 2009. This figure was bolstered by a turnaround in the second half of the year, when the unit reported net inflows due to improved advisor retention among other factors, UBS said in its earnings release.

For the entire Swiss banking group, net attributable profit for shareholders for the year was SFr7.5 billion, compared to a net loss in 2009 of SFr2.7 billion.

The business has undergone a turbulent time since the financial crisis, when it was hit hard by sub-prime related losses, but UBS said today the turnaround of client flows at its Americas business in Q4 was “encouraging”. Earlier this year, the firm's chief executive Oswald Grübel reiterated his optimistic forecast for the further growth and recovery of the US wealth management business.

Grübel told the Financial Times in an interview that there were clear signs of improvement. Robert McCann, a former senior Merrill Lynch executive who joined UBS in October 2009, has been pushing to raise the results of what had been a marginally profitable business in the past.

“Robert McCann has done a lot of good things pointing that business in the right direction and getting rid of a lot of legacy issues,” Grübel said. “There should no longer be any excuses for not returning to good profitability.”