UBS Q2 profit shrivels as trading revenue drops

 
City A.M. Reporter
UBS said on Tuesday net profit shrank to 425m Swiss francs (£276.4m) from 1bn francs on sharply lower trading revenue and a drop in commissions and fees from clients.

The Swiss bank was cautious in its outlook, saying it would continue to explore avenues to improve efficiency, without detailing further measures. The bank, which employed 63,520 staff at the end of June, is cutting roughly 3,500 jobs.

As in the first quarter, UBS highlighted that the Eurozone debt crisis, the economic outlook globally and the US fiscal "cliff" were likely to hit its business.

"Failure to make progress on these issues, accentuated by the reduction in market activity levels typically seen in the third quarter, would make further improvements in prevailing market conditions unlikely and would thus generate headwinds for revenue growth, net interest margins and net new money," UBS said in a statement.

UBS said it was nevertheless confident it would continue to gather net new assets, which totalled 13.2 billion francs in its wealth management arms in the quarter.