Leadership

UBS swings back to profit in fourth quarter

09.02.2010
Swiss bank UBS has today reported its first quarterly net profit in over a year, mostly due to a large, one-off tax credit.

UBS said it made a net profit of CHF 1.2bn (US$1.1bn) during the three months to the end of 2009. This compares to a loss of CHF 9.58bn reported during the same quarter in 2008, and a loss of CHF 564m in the third quarter of 2009.

Analysts polled by Dow Jones Newswires had expected net profits of CHF 426m.

The Swiss lender said all its business divisions reported a pre-tax profit during the fourth quarter 2009, adding that the improvement was down to lower costs, lower own credit charges and that tax credit of CHF 480m, which was mainly due to the revaluation of deferred tax assets.

In terms of outlook, UBS said in the coming quarters it expects to see the effects of the progress it has made in improving operating efficiency, reducing risk and rebuilding and re-focusing its businesses.

“We are confident that the measures we are taking to address the causes of client asset outflows will be effective, but in the immediate future we still expect to report outflows, with some pressure on margins,” UBS CEO Oswald Gruebel (pictured) said.

He also pointed out that the Swiss lender’s investment banking results always depend heavily on “market vitality”, noting that its client activity levels have been high in January.

“Although we cannot predict how long this attractive trading environment will continue, we expect that the investment bank’s performance for 2010 as a whole will improve, in part because its residual risk positions should have a much reduced impact on results,” Gruebel said.