EUROPEAN banks including UBS, Deutsche Bank and Credit Suisse face a sharp slowdown in the second quarter on the back of regional sovereign debt fears, analysts believe.
UBS chief financial officer John Cryan yesterday told an informal lunch meeting that the Swiss institution would post weaker results for the three months to the end of June after Eurozone volatility impacted on demand for initial public offerings (IPOs) and M&A advice.
Société Générale cut its earnings target for UBS by 10 per cent this year and eight per cent in 2011 after the discussion. SocGen analysts also lowered their share price forecast from SwFr16.8 (£10) to SwFr15.6.
Dirk Becker of Kepler Capital?Markets, who attended the UBS lunch, said: “The message was very clear that we should be looking at a slowdown. They had a very good first quarter and that should not be extrapolated out for the year.”
It also emerged yesterday that UBS is facing a forgery probe at its Luxembourg operation over the way it handled funds connected with US?fraudster Bernard Madoff. Luxembourg police are conducting a preliminary investigation.