UBS reports SF830m loss

Source: Exec Digital UK

Date :30/10/2007 09:10:54

UBS AG, Europe's largest bank by assets, reported its first quarterly loss in almost five years after its results were hit by the crisis in the U.S. subprime mortgage market.

Zurich- based UBS, said it had suffered a loss of 830 million Swiss francs (€495m) in the third quarter, or 49 centimes a share, compared with net income of 2.2 billion francs, or 1.07 francs, a year earlier.

The results were in line with the Swiss bank's warning on October 1 that it was expecting a pre-tax operating loss of 600 million to 800 million Swiss francs.

UBS said in a statement that the downturn in the US housing market, especially in August, was 'so severe and sudden that markets turned illiquid.'

Trading income swung to a 3.55 billion Swiss franc loss, compared to 2.4 billion Swiss francs in revenues during the third quarter of 2006.

UBS's fixed income and commodities trading plunged to a negative outflow of 4.2 billion Swiss francs.

'Our third quarter result was unquestionably disappointing,' said UBS's new chief executive Marcel Rohner.

Returning to profitability

Despite the disappointing third quarter result, the bank said it was expecting a return to profitability in the fourth quarter despite 'market uncertainties'.

Its performance in the first nine months of 2007 has been strong with new profit from continuing operations 7,713 million Swiss Francs.

UBS and Merrill Lynch & Co. are the only two Wall Street firms to report losses in the third quarter.

Last week New York-based Merrill posted the biggest loss in its 93-year history after taking $8.4 billion of writedowns, reflecting a severe worsening in the market for Collateralised Debt Obligations (CDOs).

October 30 3007

Related Links

UBS AG