UBS profits up as talks over new City office announced

UBS has reported a big increase in profits after seeing its investment banking business recover from the financial crisis.

The bank said it made a profit of 2.2bn Swiss francs (£1.3bn) in the first three months of the year.

That compares with a loss of nearly 2bn Swiss francs this time last year, when UBS was one of the banks in the grip of the sub-prime mortgage crisis.

The news came as British Land and Blackstone, joint owners of the BroadgateEstate in the the City, confirmed they were in talks with UBS about building a new block for the bank in Broadgate. There is an estimated staff of 6,000 UBS workers in London.

Last month, UBS said the bank had “turned a corner” having had problems in retaining wealthy clients.

The quarterly profit is UBS’s highest for almost three years, and beats the 1.2bn Swiss francs it made in the last three months of 2009.

The bank's investment banking arm returned to profitability at the end of last year, following more than two years of losses.

Boss Oswald Gruebel said withdrawals by rich clients would stay at moderate levels near term as the Swiss bank beat forecasts by posting its strongest quarterly net profit since the crisis begun.

He said UBS was on track to meet its medium-term goals and added that he expected a "gradual improvement in wealth management and asset management results".