Fresh losses at UBS dent hopes of a quick recovery
TROUBLED Swiss lender UBS saw its second quarter losses widen by a factor of three yesterday, as its bottom line was dented by charges on its own debt, a loss on the sale of its Brazilian unit and job cuts.
The bank fell to a quarterly net loss of Sfr1.4bn (£780m), down from a Sfr395m loss in the same period of last year and just below an analysts’ consensus forecast of Sfr1.32bn loss.
The results were impacted by Sfr582m in restructuring charges, after chief executive Oswald Gruebel slashed 7,500 jobs.
UBS also lost Sfr492m on the sale of UBS Pactual in Brazil, as well as taking a Sfr1.2bn charge on its own debt.
In wealth management, pre-tax profits fell from Sfr1.07bn last year to Sfr932m, as the lenders’ clients withdrew Sfr22.3m.
Outflows were partly due to the ongoing tax dispute with US tax authorities, who have demanded that the bank hand over details of 52,000 US citizens suspected of tax evasion.
In investment banking, UBS narrowed last year’s Sfr3.1bn loss to Sfr1.84bn, while asset management booked a pre-tax profit of Sfr82m, reversing last year’s loss of Sfr59m.
Gruebel offered little to be optimistic about, despite his ongoing efforts to turn the bank around.
He said: “The overall economic environment in most of the regions in which we operate remains recessionary. Sustainable recovery is not yet visible.”
UBS is also close to hiring former Merrill Lynch executive Bob McCann to help resolve its tax dispute.