Switzerland's largest bank, UBS, has reported that net profit for the second quarter slumped by 33 per cent to SFr1.385 billion ($820 million). About half of the decline was attributable to the performance of UBS Capital, which lost SFr351 million in private-equity investments.
However, the fall was not as great as had been expected by analysts and helped push up the price of UBS shares at the stock exchange in Zurich.
UBS said in a statement on Tuesday that the results came against a background of slowing economic growth in the major economies and uncertainties in securities markets, in contrast to the relatively favourable conditions of the second quarter last year.
However, UBS reported that the group's core businesses had delivered stable revenues despite the unfavourable market conditions and continued to improve their competitive positions.
Record levels of underwriting fees, portfolio management fees and investment fund fees helped to bring fee and commission revenue to an all-time high of SFr5.375 billion, representing 54 per cent of the group's revenues.
The statement added that costs remained under tight control, with an increase of two per cent over the first quarter of the year.
The president of the group's management, Luqman Arnold, said that core businesses remained in good health. "During this quarter, we have gained market share in key areas and attracted significant client assets to our wealth management businesses," he commented.
Net new money of SFr24 billion brings the group total for the year to SFr45 billion and total invested assets to SFr2.56 trillion.
In its outlook, UBS said that market conditions remained difficult to assess and the chances of a short-term improvement in the operating environment seemed low.
Given that the summer months often have less activity, immediate prospects remained challenging, the bank said. However, the competitive gains across UBS businesses were encouraging.
"We remain cautious and disciplined, given the uncertain outlook, but we are taking every opportunity we can to ensure our businesses come out of the market downturn stronger and better positioned than they went in," Arnold said.
Basic earnings per share were SFr1.37, a decline of 31 per cent from the second quarter of 2000, but a decline of nine per cent from the first quarter this year. This reflected a relatively stable performance in difficult market conditions, UBS commented.
The Credit Suisse group plans to present its second quarter 2001 results on August 29.
swissinfo with agencies