UBS expects profit despite rogue trader losses
Swiss banking giant UBS expects to post a “modest net profit” for the third quarter of 2011, despite being rocked by a rogue trading scandal in London in September..
The result includes the $2.3 billion (SFr 2.1 billion) loss resulting from “the unauthorised trading incident” and approximately SFr0.4 billion of restructuring charges associated with the firm's cost reduction programme.
In a statement, the bank said positive net new money in its wealth management businesses was expected to be broadly similar to the second quarter of 2011.
The third quarter result will also benefit from credit gains on financial liabilities, measured, UBS said, at fair value on the region on SFr1.5 billion.
UBS will also report a gain on the sale of treasury-related investments of approximately SFr0.7 billion in its Wealth Management & Swiss Bank units.
The bank said its cost reduction programme was on track, with the majority of affected employees having being notified.
No further updates are anticipated by UBS before it announces its third quarter results on October 25.
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