UBS, the world's biggest wealth manager, today struck a more optimistic tone for 2017 on the back of rising US interest rates as it posted a 47% fall in full-year net profit. 

The bank's flagship wealth management division is struggling amid record-low interest rates and a preference among billionaire and millionaire clients for holding cash.

It said its 2016 net profit fell to 3.3 billion Swiss francs ($3.3 billion) from 6.2 billion in 2015.

"Although macroeconomic uncertainty, geopolitical tensions and divisive politics continue to affect client sentiment and transaction volumes, we have begun to observe improved investor confidence, primarily in the US, which may benefit our wealth management businesses," Switzerland's biggest bank said. 

Earnings in 2015 had been boosted by a substantial tax benefit but 2016 pre-tax operating profit was still down 24%. 

In the fourth quarter, net profit came in at 738 million francs. 

This was well ahead of the median estimate of 339 million in a Reuters poll of 15 analysts, partly thanks to lower-than-expected litigation provisions. 

Quarterly net profit was down from 949 million francs a year earlier, when numbers benefited from a net tax benefit of 715 million francs. 

Nevertheless, the bank said it would offer an unchanged ordinary dividend of 0.60 francs for 2016, in line with market expectations. 

Last year, UBS had also paid a special dividend of 0.25 francs per share on the back of an increased revaluation of deferred tax assets. 

UBS said it had suffered net outflows in the quarter at its Wealth Management and Wealth Management Americas divisions of 4.1 billion francs and $1.3 billion respectively. 

The bank netted 100 million francs in fourth-quarter savings, bringing total net cost cuts since 2013 to 1.6 billion francs. It is targeting net cuts of 2.1 billion francs by the end of 2017.