Skip to main content
Advertising

Originally published Monday, April 29, 2013 at 10:18 PM

  • Share:
           
  • Comments (0)
  • Print

UBS posts $1 billion net profit in first quarter

A first-quarter net profit of $1 billion thanks to strong investment banking and wealth management sent shares in Swiss bank UBS AG up 5 percent Tuesday morning on the Swiss stock exchange.

Associated Press

Most Popular Comments
Hide / Show comments
No comments have been posted to this article.
Start the conversation >

advertising

GENEVA —

A first-quarter net profit of $1 billion thanks to strong investment banking and wealth management sent shares in Swiss bank UBS AG up 5 percent Tuesday morning on the Swiss stock exchange.

The result posted by Switzerland's biggest bank, headquartered in Zurich and Basel, Switzerland, caused shares to jump to 16.5 francs soon after trading began.

Though net profit was down 4.5 percent from the comparable period a year ago, the result was nonetheless a significant recovery from the $2 billion loss the bank posted for the fourth quarter of 2012 in the wake of a series of major lawsuits, scandals and a wave of restructuring.

"While it is too early to declare victory, we have shown our business model works in practice," Chief Executive Sergio Ermotti said. "Although markets improved, we still saw challenges, so I am very pleased with our performance."

Ermotti said the bank's capital cushion as demanded by global and Swiss regulations rose to 10 percent "and our leading capital cushion continues to be a competitive advantage for the bank."

In the first quarter, the investment bank saw a profit of 977 million francs before taxes and the wealth management arm posted a profit 664 million francs before taxes.

Its total operating expenses decreased more than 1.7 billion francs, down to 6.3 billion francs, mainly due to fewer net charges on its legal and regulatory bills, and general and administrative expenses were also lowered by 1.8 billion francs.

But personnel expenses including higher performance awards rose 357 million, up to 4.1 billion francs, despite 846 fewer jobs to pay for since the end of 2012.

UBS said it had cut down to 61,782 jobs at the end of March - 2,461 fewer jobs than a year earlier - and warned of continued high expenses.

"In view of the current regulatory and political climate affecting financial institutions, and because we continue to be exposed to a number of claims and regulatory matters arising from the financial crisis of 2007-2009 and other matters, we expect charges associated with litigation, regulatory and other matters to remain at elevated levels at least through 2013," UBS said.

The bank, which is cutting thousands of jobs as it pulls back on some of its risker fixed-income banking, said it was confident it could keep attracting new money particularly to its private bank as it reduces its riskier investment banking. More broadly, though, it offered a cautionary outlook on the rest of the year due mainly to Europe's continuing problems.

"While market participants showed renewed interest early in the first quarter, events in Europe served as a reminder that many of the underlying challenges related to structural issues remain unsolved," the bank said.

"The absence of further sustained and credible improvements to the eurozone sovereign debt situation," it continued. "European banking system issues, ongoing geopolitical risks, and the outlook for growth in the global economy together with an increasing focus on unresolved U.S. fiscal issues would continue to exert a strong influence on client confidence, and thus activity levels, in the second quarter of 2013."

News where, when and how you want it

Email Icon


Advertising
The Seattle Times

The door is closed, but it's not locked.

Take a minute to subscribe and continue to enjoy The Seattle Times for as little as 99 cents a week.

Subscription options ►

Already a subscriber?

We've got good news for you. Unlimited seattletimes.com content access is included with most subscriptions.

Subscriber login ►