The country's largest bank, UBS, says its 2001 net profit fell by 36 per cent compared with the previous year to SFr4.97 billion ($2.91 billion).

The figure defied analysts who had forecast a much worse performance.

"I think it is a great set of figures for UBS, about 25 per cent higher than the average forecast," cantonal bank of Zurich analyst Christoph Ritschard told swissinfo.

Net income for the fourth quarter was SFr1.1 billion, higher than expected by most analysts.

However, the bank warned that prospects for 2002 were not encouraging.

"As prospects for an economic recovery recede to the latter part of the year, the potential to outperform 2001 is limited," UBS said in a statement.

The bank, which includes the world's largest private wealth management business, said that assets invested for clients at the end of December 2001 totalled SFr2.457 trillion, up from SFr2.28 trillion at the end of September 2001.

UBS is the world's ninth largest bank.

Most analysts say it has emerged from a difficult quarter in better shape than many of its competitors, having escaped the worst of the fallout from the Argentinian economic crisis and the Enron collapse.

The bank ousted its top executive, Luqman Arnold, in December and replaced him with Peter Wuffli.

Overstepping his authority?

In a related development, a report in the Financial Times says the UBS board has criticised its own chairman, Marcel Ospel, for overstepping his authority in his attempts to involve the bank in the rescue of Swissair at the end of last year.

The report says that at least one member of the board considered resigning over the issue of corporate governance. Under Swiss banking law, the board and its chairman are responsible mainly for guidance and supervision. Day-to-day management is the reponsibilty of the group executive board, led by Luqman Arnold until he was fired.

The FT says the affair led Arnold to complain to the board and the newspaper quotes a person close to the board as saying there was "a very frank discussion" at a subsequent board meeting.

Analyst Ritschard said he did not think there was a corporate governance problem within UBS. "There's a separation between the management and board teams so I think Marcel Ospel sits very firmly in his position. I do not see reasons for concern," he told swissinfo.

swissinfo with agencies

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