Swiss bank UBS on Tuesday reported net profit for 2015 ahead of analyst expectations, but warned that volatile markets, low interest rates and a strong Swiss franc would continue to present headwinds.
The stock was down over 7 percent in early deals.
The group reported net profit up 79 percent at 6.2 billion Swiss francs, ahead of a consensus forecast compiled by Reuters of 5.75 billion Swiss francs.
The fourth quarter was characterized by very low levels of client activity and pronounced risk aversion, the group said. Fourth-quarter net profit nonetheless beat forecasts.
UBS Chief Executive Sergio Ermotti said the recent wild gyrations in financial markets had been tough on the bank. "It is the kind of volatility that de facto paralyzes a lot of investors," he told CNBC. "You see a lot of volatility which de facto scares people more than being a constructive element for our businesses."
But by prudently managing resources and risk, Ermotti said the bank was weathering the storm. Clients were still happy with their asset allocation at this stage, he said. "They believe the underlying fundamentals are still ok."
The wealth management business reported its best annual pre-tax profit since 2008 but net new money outflows amounted to 3.4 billion Swiss francs for the quarter, reflecting significant client deleveraging.
With oil prices near 12-year lows and smaller companies being pushed into bankruptcy, concerns have been raised about banks' exposure to the energy sector. Ermotti said UBS had around 6.1 billion Swiss francs of exposure to the industry. More than 50 percent was in investment grade and was well diversified, he said, while almost 90 percent is in North America.
"We feel very comfortable with this exposure," he said.
But Ermotti sounded a cautious note for this year. "Our outlook unfortunately has been quite constant in the last few quarters. I see this convergence again of geopolitical issues with macroeconomic considerations still putting a lot of pressure on investor sentiment."