UBS' quarterly profit fell on the year, as a big tax benefit in the previous year period fell away. Behind the 827 million Swiss franc profit: cost cuts and stagnant or falling revenue in its main businesses.

Swiss bank UBS said net profit for the quarter was 827 million Swiss francs, compared to 2.068 billion francs one year ago when it booked a billion-franc tax benefit.

A deeper look reveals that the bank managed to cut its spending by 4 percent, offsetting a 2 percent drop in revenue due to a fall in income from fees and interest. Revenue from trading held steady on the year.

UBS Chief Executive Sergio Ermotti stowed more funds in the quarter to deal with lawsuits and regulatory blow-ups, and he also flagged higher overall spending to comply with international banking rules.

More Spending

«Implementing Switzerland’s new bank capital standards and the proposed further changes to the international regulatory framework for banks will result in increasing capital requirements and costs,» UBS said in a statement.

UBS has been vocal about its private bank's troubles: mainly that it cannot turn inflows of fresh funds into revenue. In the most recent quarter, the bank recorded 9.4 billion francs in net new money, as inflows in Asia and Europe made up for outflows in its Swiss cross-border business.

The unit's profit fell nearly 8 percent to 643 million francs, as wealthy clients shied away from trading or investing.

Quarter's Hidden Gem

UBS' investment bank's pretax profit shriveled to 342 million francs from 614 million, as revenue from equities collapsed on the year and income from issuing stocks and bonds for corporate clients fell.

The quarter's hidden gem was its personal and corporate banking business, home to retail activities and business with companies in Switzerland. There, pretax profit surged more than 10 percent, despite shouldering negative interest rates in Switzerland. The unit's revenue rose, spending fell and the quarterly result was the best since the financial crisis of 2008-09.

Asset Management Profits: Virtually Unchanged

UBS' asset management business, where the bank aims to squeeze 1 billion francs in profit, recorded virtually unchanged profits while winning 2 billion in new funds, largely from outside the bank.

The bank's capital – its forte versus competitors like Credit Suisse, which reports next Thursday, and Deutsche Bank, which surprised investors with a profit on Wednesday – stood at 14 percent in the quarter.