Wednesday November 14, 3:00 PM
UPDATE 1 UBS Q3 profit down 35 pct vs Q2 in tough markets
sg.biz.yahoo.com
By Alice Ratcliffe
ZURICH, Nov 13 (Reuters) - UBS AG , Switzerland's largest bank, said on Tuesday net profit in the third quarter fell 35 percent from the second quarter to 903 million Swiss francs ($551 million), reflecting difficult markets.
Analysts had forecast a net profit of around one billion francs for the most recent period. UBS said it expected deteriorating economic conditions and their market impact to continue to influence performance in the short run. The third-quarter figure compares with a net profit of 1.385 billion francs reported for the second quarter of 2001.
Pre-tax profits at UBS Warburg's main investment banking business fell to 878 million francs, down 27 percent year-on-year. The drop reflected especially tough equity markets, heightened by the impact of the September 11 attacks on the United States. But fixed income revenues were resilient, UBS said.
Revenues at Warburg's entire operations fell to 5.003 billion francs from 5.689 billion in the second quarter, but operating expenses at the unit fell to 4.622 billion francs from 5.221 billion francs in the second quarter.
The drop in expenses was due partly to lower compensation in weak markets and tight control on costs.
"The cost/income ratio is absolutely integral to all of our businesses...and this cost discipline gives us strategic flexibility," said Luqman Arnold, president of UBS's executive board.
He said that the UBS's "main investment banking business never built up overcapacity in the last couple of years, unlike our competitors, and we therefore believe we do not have that overcapacity, and indeed see ourselves taking market share through this period," Arnold said in a media briefing. |
