UBS net profit down amid "mixed" outlook

UBS says it has managed to avoid any major credit losses Keystone

Switzerland's biggest bank, UBS, has announced that second quarter net profit fell to SFr1.331 billion ($890.3 million) - down four per cent on the same period last year.

This content was published on August 13, 2002 minutes

The better-than-expected result was slightly above market expectations.

Peter Wuffli, UBS Group president, said the result showed the bank had come through recent stock market troubles without serious damage.

"We have weathered the storm reasonably well, no disasters despite the rough market conditions," said Wuffli.

However, the bank again warned that it did not expect full-year results to match last year's because of recent equity market turbulence and the poor outlook for the world economy.

Outlook "mixed"

The bank reported credit losses in the second quarter of some SFr37 million, down from SFr76 million in the same period last year.

"We have continued the trend and continued to avoid any major credit losses," added Wuffli.

However, Wuffli warned that the outlook for what is regarded as the world's largest manager of private client wealth remained mixed.

"Overall (it's) a mixed picture and quite a high degree of uncertainties," he said.

Wuffli said low corporate activity would continue to subdue proprietary trading - one of the bank's most profitable sectors.

The markets responded positively to the result, pushing UBS shares up around 2 per cent to SFr67.45 during morning trading on Tuesday.

Korean sanctions

The quarterly figures came amid news that South Korean financial regulators have sanctioned UBS Warburg for leaking market sensitive information to some of the bank's clients.

The country's financial supervisory service said on Tuesday that it had investigated files, telephone logs and emails, showing UBS Warburg, along with the United States accounting firm Merrill Lynch, had leaked details of company research reports several days ahead of their release.

Korean authorities said they would maintain their surveillance of the two companies, and warned of shut downs in the case of further transgressions.

Mark Branson, the UBS chief communication officer, told swissinfo that the bank "regretted the breaches" and said disciplinary action against staff would be taken.

"We are actually pretty pleased that (the breaches) have been identified and can be rectified," Branson told swissinfo.

"They were totally unintentional and they are not something that benefited either UBS Warburg or disadvantaged any clients," he said.

Branson said the bank always tried to maintain high standards of business practice in countries around the world.

"Sometimes there are slip-ups where we misapply local regulations and we have to rectify that, as in the case of South Korea," he said.

swissinfo with agencies

Key facts

Second quarter net profit fell to SFr1.331 billion.
Down four per cent on the same period last year.
Figure is above analysts' expectations.

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