UBS salvages Q3 profit with one-off gain
By Emma Thomasson
ZURICH (Reuters) - Swiss bank UBS AG UBSN.VX UBS.N overcame a 1.8 billion Swiss franc ($2 billion) rogue trading loss to post a smaller than forecast fall in third quarter net profit on Tuesday as its core wealth management business performed well.
Managing money for rich clients held up well, with strong inflows to the bank's Americas unit, despite tough economic conditions and the bad publicity of the trading scandal, made public two weeks before the quarter ended.
Although net profit for the third quarter fell by 39 percent to 1.018 billion francs at UBS, it beat average analyst forecasts for 276 million, after big one-off items flagged earlier this month had a more positive impact than expected.
Adjusted for one-off items, pre-tax profit was 588 million francs, beating most forecasts, analysts said.
"A strong performance in wealth management operations, offset by a worse than expected investment banking performance," said Espirito Santo analyst Andrew Lim.
"The underlying operating profit figure is not as strong as at first glance."
UBS shares rose as much as 3 percent but reversed their gains to trade flat at 11.14 francs at 1407 GMT, outpacing a 1.9 percent weaker European banking index , down along with most other shares.
Interim Chief Executive Sergio Ermotti, appointed after Oswald Gruebel quit over the trading loss, described the quarter as "very challenging for both the industry and the bank" and said the fourth quarter had started with "increased evidence of strain to the financial system." Continued...