UBS expects slim profit after rogue trader scandal

 
City A.M. Reporter
Swiss bank UBS it expects to report a modest net profit for the third quarter after a $2.3bn rogue trading scandal.

It also said it expected net new money in its wealth management business to be broadly similar to the second quarter.

"UBS expects to report a modest net profit attributable to shareholders for the third quarter of 2011," it said in a statement.

UBS said its third-quarter result would be hit by the $2.3bn allegedly lost by London trader Kweku Adoboli and some 0.4 billion Swiss francs of restructuring fees as the firm seeks to trim costs.

But a 1.5 billion Swiss franc credit gain on its financial liabilities and a 0.7bn franc gain on the sale of treasury-related investments in Wealth Management in Switzerland were expected to have a positive impact on the Q3 result, it said.

UBS added its BIS Basel II Tier 1 capital ratio was expected to decline slightly due to the trading scandal.

UBS, which will report third-quarter results on 25 October, said its plans to cut costs remained on track and staff cuts would continue into 2012.