UBS posts strong first-quarter on trading income surge
By Katharina Bart
ZURICH (Reuters) - UBS UBSN.VX beat expectations for first-quarter profit thanks to a surge in trading income from its investment bank and more fees from wealthy clients.
Net profit at Switzerland's biggest bank slipped 5 percent to 988 million Swiss francs ($1.05 billion) compared with average analysts forecasts of 601 million in a Reuters poll.
UBS, which is cutting 10,000 jobs in a retreat from riskier fixed income activities, cautioned that economic worries might slow trading by wealthy clients and hit second-quarter revenue, margins and fresh inflows.
But it said it was confident it would keep winning net new money, a key bellwether for future revenue.
UBS's private bank, which forms the cornerstone of the bank's strategy and must deliver the bulk of the profit in future as the investment bank shrinks, snapped back from a poor fourth quarter with a 67 percent rise in pretax profit.
Fees from trading and transactions at the private bank perked up on a "significant uptick" of client activity in the first six weeks of 2013, particularly in Asia, UBS said.
"It's too early to declare victory for sure, but it's good to see we're gaining momentum," UBS Chief Executive Sergio Ermotti told journalists at a briefing.
UBS, the second-largest private bank in the world after Bank of America (BAC.N: Quote), is trying to rid itself of a scandal-tainted image and focus far more strongly on private banking clients, or those with more than $1 million in assets to bank. Continued...