Mixed results for Switzerland’s largest bank
UBS, Switzerland's largest bank, has reported a 54 per cent drop in first-quarter net profits for 2012. The bank blamed the drop on challenging market conditions, losses incurred in investment banking and accounting charges on its debt.
First-quarter net profit fell to SFr827 million ($910 million) from SFr1.81 billion for the same period last year. The bank released the figures on Wednesday morning before trading opened in Zurich.
However, the results were up on the last quarter of 2011, when the bank posted a net profit of only SFr319 million. Shares of UBS stock rose by six per cent SFr12.01 ($13.22) in mid-morning trading on Wednesday.
Looking ahead to the second quarter, UBS was less than optimistic – citing Europe’s sovereign debt crisis, the United States federal deficit and ongoing global uncertainties.
“Failure to make progress on these key issues would make further improvements in prevailing market conditions unlikely and would have the potential to continue the headwinds for revenue growth, net interest margins and net new money,” the bank reported.
CEO Sergio Ermotti said that the bank had performed well despite the “challenging” market conditions.
“We improved operational performance across all our businesses, strengthened our leading capital ratios further, reduced risk-weighted assets and remained vigilant on costs,” he said in a statement. “The strong net new money inflows in our wealth management businesses provide further clear evidence of the trust our clients place in UBS.”
At its annual general meeting, scheduled for Thursday, the bank’s board of directors will recommend that investors elect former Bundesbank president Axel Weber to replace outgoing UBS chairman Kaspar Villiger.
Some investors plan to confront the management of UBS on Thursday by voting against the bank’s 2011 pay award and refusing to give executives formal approval for their actions.
The Financial Times reported on Wednesday that a substantial number of shareholders “are expected to refuse to give management a clean bill of health for 2011 due to the trading scandal and UBS’s admission that the incident revealed ‘shortcomings’ in its risk management”.
In compliance with the JTI standards
More: SWI swissinfo.ch certified by the Journalism Trust Initiative
You can find an overview of ongoing debates with our journalists here. Please join us!
If you want to start a conversation about a topic raised in this article or want to report factual errors, email us at english@swissinfo.ch.