"You're always going to have problems but many of those problems will be more and more industry wide, and of course, we are going to tackle them, but that's the reason we want to be strong in our capital position,and we what to be able to address these issues in a position of strength," he added.
The bank has already strengthened its Basel III capital ratios - around 9.8 percent by the end of 2013 making it one of the best in the sector. "We'll have a progressive dividend policy but most importantly we'll have pay-out ratio of at least 50 percent when we achieve our 13 percent Basel III fully applied equity ratio, this is something to be expected by the end of 2013," Ermotti said.
Dirk Becker, Banking Analyst at Kepler Capital Markets warned that despite some good numbers the bank could end up regretting its departure from the investment banking sector.
"I'm not so positive. I don't necessarily think that investment banking is a bad business. There will be times in the cycle when investment banking is very good and when UBS leaves this there is no way back. It's a decision that they can't reverse," Becker said.
"Within the wealth management [business] we saw a very sharp drop in margins once again and not for the first time the margins are now trading at an all-time low. We had very disappointing net new money inflows.Investors want a very good wealth management operation when they buy UBS and what we're finding out now is that the wealth management is not as good as we thought," he said.
He added that he expected margins to pick up cyclically but there remained a structural element to issues which could affect UBS long term.
"The demise of the bank secrecy, the move away from [the] traditional high margin market of Western Europe to the lower margin markets of Asia and Pacific [and] recession problems and other things that will structurally depress the margins. I don't think they will get back to the 95 basis points target which UBS put out," he added.