This Day On The Street
Continue to site
ADVERTISEMENT
This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here

UBS Shares Rise on News of FHFA Settlement

NEW YORK ( TheStreet) -- Shares of UBS (UBS) rose more than 3% in pre-market trading after it pre-announced its second-quarter results and said it entered into an settlement with the Federal Housing Finance Agency(FHFA) over claims related to mortgage-backed securities sold between 2004 and 2007.

The FHFA, regulator of bailed-out mortgage giants Fannie Mae (FNMA) and Freddie Mac (FMCC), in 2011 sued 18 banks, including Bank of America (BAC - Get Report), Citigroup (C - Get Report) and UBS, in connection with mortgage-backed securities sold to the agencies during the height of the subprime mortgage boom.

The regulator claimed the banks misrepresented the underlying quality of the mortgages.

UBS did not disclose the size of the settlement. It did disclose that its second quarter results would include a pre-tax charge of CHF 700 million (approximately $750 million) in its non-core and legacy portfolio.

The bank said the settlement would "encompass pending RMBS-related litigation brought by the FHFA against UBS on behalf of Fannie Mae and Freddie Mac as well as certain unasserted claims," and would be covered by litigation reserves set aside by UBS in the second quarter of 2013 and in prior periods.

UBS is the latest bank to settle charges in connection with the lawsuit. In late May, Citigroup announced that it had entered into a settlement with FHFA over $3.5 billion worth of MBS for an undisclosed sum. Earlier in the year, GE (GE - Get Report) announced that it had settled the lawsuit, again keeping the terms of the agreement confidential.

The Swiss bank reported a second-quarter net profit CHF 690 million (approximately $738 million) and said that it had made progress towards capital goals, with its Basel III Tier I common ratio rose to 11.2%.

-- Written by Shanthi Bharatwaj New York.

>Contact by Email.

Disclosure: TheStreet's editorial policy prohibits staff editors and reporters from holding positions in any individual stocks.

Check Out Our Best Services for Investors

Action Alerts PLUS

Portfolio Manager Jim Cramer and Director of Research Jack Mohr reveal their investment tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
Quant Ratings

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
Stocks Under $10

David Peltier uncovers low dollar stocks with serious upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
14-Days Free
Only $9.95
14-Days Free
Dividend Stock Advisor

David Peltier identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Updates with exact steps to take - BUY, HOLD, SELL
Trifecta Stocks

Every recommendation goes through 3 layers of intense scrutiny—quantitative, fundamental and technical analysis—to maximize profit potential and minimize risk.

Product Features:
  • Model Portfolio
  • Intra Day Trade alerts
  • Access to Quant Ratings
Options Profits

Our options trading pros provide over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.

Product Features:
  • Actionable options commentary and news
  • Real-time trading community
SYM TRADE IT LAST %CHG
BAC $16.74 1.45%
C $54.87 1.16%
GE $27.52 0.00%
UBS $21.77 2.06%
AAPL $132.04 1.87%

Markets

DOW 18,162.99 +121.45 0.67%
S&P 500 2,123.48 +19.28 0.92%
NASDAQ 5,106.5930 +73.8420 1.47%

Partners Compare Online Brokers

Free Reports

Top Rated Stocks Top Rated Funds Top Rated ETFs