UBS has agreed a settlement with a US regulator over claims it mis-sold mortgage-backed securities during the pre-crisis housing bubble.
The Swiss bank reached agreement with the Federal Housing Finance Agency (FHFA) over investments sold to the government mortgage finance companies Fannie Mae and Freddie Mac. The two institutions were central to the subprime crisis and almost collapsed in 2008.
UBS said the settlement, relating to securities sold between 2004 and 2007, was "subject to documentation and final approvals by the parties", but added the full cost would be covered by provisions made in the second quarter and previously.
It said pre-tax charges over the period would total 865 m Swiss francs (£601 m) – covering litigation, other provisions and a Swiss-UK tax agreement.
The FHFA was established in 2008 to oversee Fannie Mae, Freddie Mac, and the Federal Home Loan Banks and to promote a more stable housing and mortgage market. The settlement with UBS relates to one of a group of cases filed by the FHFA.
The regulator sued 18 banks in 2011, accusing them of violating securities laws by misleading Fannie and Freddie about $200 bn (£130 bn) in mortgage-backed securities they purchased. The banks include Barclays, Royal Bank of Scotland, Goldman Sachs and Deutsche Bank.
Despite the charges, UBS said its second-quarter profit rose to 690 m francs from 425 m francs in the same period a year earlier, beating analysts' expectations.
UBS said it would publish a full financial report for the second quarter on 30 July.
The bank announced last year it would cut 10,000 jobs over three years and focus on serving wealthy clients while scaling down its investment banking business.
It followed heavy losses on the bank's mortgage book during the financial crisis and its involvement in the Libor-rigging scandal.
UBS said on Monday it received 10.1 bn francs of new money into its wealth management business in the second quarter.
Its US private banking arm had net inflows of 2 bn francs, while 2 bn francs were withdrawn from its global asset management business.