Wealth manager UBS reported a record full-year profit but saw its shares slump as investors reacted to higher costs and disappointing trading at its investment banking division.
Switzerland-based UBS reported full-year net profit of 12.257 billion Swiss francs ($9.81 billion) and net new money inflows for the full year into asset and wealth management of 151.7 billion francs.
But reassurances from Chief Executive Peter Wuffli that a hiring spree was over and that the cost/income ratio - a key measure of efficiency - should stabilise failed to prevent investors from selling UBS stock lower.
Shares fell 2.5 per cent to 77.6 francs earlier today in heavy trading, making them the biggest blue-chip losers in Europe, on worries over rising costs after the group took on 8,500 new staff in 2006.
Traders also pointed to weak trading at its hedge fund, Dillon Read Capital Management, and its wealth management arm in the United States as weighing on the stock.
UBS said fourth-quarter net profit from continuing operations rose 19 per cent to 3.145 billion francs from a year earlier, driven partly by record business in investment banking.
The result was well ahead of analysts' expectations, who had on average predicted net profit of 2.727 billion francs.