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* Financial advisers up 23 to 6,783
* Client assets up by 1 bln CHF to 743 billion CHF
* U.S. and Canada unit had net new money 300 mln francs
By Joseph A. Giannone
NEW YORK, Oct 26 (Reuters) - Swiss bank UBS AG's UBSN.VX Americas brokerage unit posted a third-quarter loss after a costly U.S. arbitration ruling, but its financial adviser ranks rose for the first time in more than a year and outflows were stemmed.
Clients also added more money than they withdrew for the first time since the first quarter of last year.
The U.S. and Canadian wealth management operations of UBS brought in 300 million francs ($292 million) of net new money. UBS brokers had suffered 37.5 billion francs in withdrawals in the previous five quarters.
The bank, which reports its U.S. and Canadian unit's results in Swiss francs, said the quarter reflected the weakening dollar. It was the unit's sixth quarterly pretax loss since the fourth quarter of 2008.
Excluding a 78-million-franc arbitration ruling, UBS said the unit turned a 31 million franc profit. [ID:nLDE69O0N5]
Nearly one year after former Merrill Lynch executive Robert McCann took over as chief executive, the UBS brokerage posted a pretax loss of 47 million Swiss francs ($46 million), compared with 110 million francs ($107 million) of pretax income a year earlier.
That said, the long-struggling business showed signs of progress. The ranks of financial advisers climbed by 23 to 6,783, while client assets rose by 1 billion francs to 743 billion francs ($724 billion).
Revenue fell to 1.34 billion francs ($1.31 billion), down 10 percent from the second quarter and 3 percent less than last year. UBS said the declines were primarily due to a weakening U.S. dollar against the Swiss franc.
Operating expense fell by 7 percent, excluding the arbitration award, as McCann sheds excess real estate and cut support and back-office jobs. (1 Swiss franc = US$0.9745) (Reporting by Joseph A. Giannone; Editing by Derek Caney)