SWISS banking giant UBS yesterday went some way towards putting to rest stubborn fears over its financial health, smashing City expectations with its strongest set of profits in three years.
UBS – which took a mighty hammering in recent years from the financial crisis, heavy withdrawals and a bitter US tax fraud investigation – posted a pre-tax profit of SwFr2.81bn (£1.69bn) for the first quarter, up from a loss of SwFr 1.55bn in the first three months of 2009.
The group’s recovery was driven in large part by soaring profits at its investment bank, which swung back into the black over the quarter with a pre-tax profit of SwFr 1.19bn thanks to a strong performance in its fixed income, currency and commodities division.
Chief executive Oswald Gruebel, who was drafted in to improve the bank’s fortunes last year, remained cautious on the outlook for outflows in its signature wealth management business, which he said would stay “at relatively moderate levels in the near term”.
The bank’s well-heeled clients pulled a net SwFr 18bn of money out of UBS over the quarter, more than the SwFr 14.9bn of withdrawals it saw in the first quarter of last year. However, the figure was less than a third of the net outflows the bank recorded in the last three months of 2009.
UBS’s results came as it emerged yesterday that British Land and Blackstone Group are to redevelop part of the Broadgate office site to provide more space for the bank, its biggest tenant.
UBS, which employs around 6,000 people in London, is expected to move into the new building on the site of 4 and 6 Broadgate.
Under the terms of its current contract, the bank could have moved out of the development when its lease runs out in four years’ time.