UBS expects Q2 results at or slightly below break-even
The Swiss bank’s surprise announcement saw shares in the bank jump 8.2 percent to CHF 22.74.4 July 2008
ZURICH - Swiss bank UBS surprised the market Friday by announcing that it expects its second-quarter results to be "at or slightly below break-even."
Shares in the crisis-hit bank jumped 8.2 percent to CHF 22.74 on the announcement, before easing back to CHF 21.90 on the Zurich exchange.
UBS said its balance sheet will benefit from a CHF 3 billion tax credit that will partially offset further predicted losses in its investment business.
The bank also said it had a positive quarter in its global wealth and asset management businesses, while continuing to see more withdrawals than deposits during the period up to July.
Analysts had predicted UBS would make a net loss during the quarter of CHF 1 to 5 billion.
Switzerland's No. 1 bank has been struggling with heavy subprime-related losses for the past year and was twice forced to seek outside capital injections. It said Friday that this will not be necessary when second-quarter results are formally announced 12 Aug.
Analysts at Zuercher Kantonalbank said the news would be welcomed in the short-term, but noted that UBS still holds sizable risky investments and faces difficulties in connection with a high-profile tax probe in the U.S.
[AP / Expatica]