The outflows were stemmed as fewer rich clients took money out in protest at the bank’s recent losses, UBS said. Other institutions in the region will take heart from the trend, which comes amid an international crackdown on tax havens including Switzerland.
In a surprise announcement ahead of what is likely to be a combative encounter with shareholders tomorrow, UBS also said it expected to make its largest pre-tax profit since the financial crisis began.
The figure will come in at more than SwFr2.5bn for January to March, better than expected and three times the amount generated in the fourth quarter of last year. It was driven by a rebound in the bank’s fixed income business.
Oswald Grübel, parachuted in as chief executive in February 2009 to turn around UBS’ fortunes, tomorrow faces investors angry at the perceived arrogance of the group’s senior management during the global downturn. Some shareholders are agitating to reject a new bonus scheme devised by Grübel, and want to defy plans to clear former executives of responsibility for the crisis.
Marc Deuster, analyst at Bank am Bellevue, said: “It could well be a non-event, but it could equally turn into something nasty.”
TIME LINE | A SWISS TITAN IN TURMOIL
• 10 February 2009
UBS reports a deficit of SwFr21.3bn (£13bn) for 2008, the largest corporate loss in Swiss history. It cuts 2,000 jobs.
• 19?February 2009
US tax authorities say they are pursuing a civil lawsuit seeking the details of 52,000 UBS clients.
• 26 February 2009
Oswald Grübel comes out of retirement to take up the chief executive role, tasked with repairing UBS.
• 20 August 2009
The Swiss government sells its nine per cent stake in UBS for SwFr5.5bn, returning a healthy profit to the taxpayer.
• 3 November 2009
UBS announces its fourth consecutive quarterly loss as SwFr36.6bn of outflows gush from private client accounts.
• 27 January 2010
Switzerland says it will talk to Washington in a bid to solve the legal impasse over tax evaders’ accounts.
• 9 February 2010
UBS posts its first quarterly net profit since Grübel took the helm, generating SwFr1.2bn.
• 24 February 2010
The Swiss government moves to plug a legal hole that helped banks such as UBS avoid handing clients’ details to the US.