UBS Q2 profits beat forecasts

UBS’s second-quarter profit beat forecasts even though it agreed to settle a lawsuit with the US housing regulator over the mis-selling of mortgage-backed bonds, boosting shares in Switzerland’s largest bank to two-year highs.

A number of European banks including Deutsche Bank, Barclays, Credit Suisse, HSBC and Royal Bank of Scotland collectively face possible multi-billion euro bills arising from US cases involving mortgages, which lay at the heart of the 2008 financial crisis.

UBS said yesterday it had reached an agreement in principle with the Federal Housing Finance Agency, prompting it to release its headline second-quarter results more than a week early, showing net profit had jumped by nearly two thirds.