UBS posts 2.2 billion francs first quarter profits

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Swiss banking giant UBS on Tuesday reported broad recovery across its businesses, with net profits reaching 2.2 billion francs (1.54 billion euros, 2.3 billion dollars) for the first quarter.

The earnings beat analysts forecasts of 2.0 billion francs, according to a poll by economics newswire AWP, and marked an 83 percent jump from the previous quarter.

The group recorded pre-tax profits across all business groups including investment banking, which had run up big losses during the financial crisis but which now recorded 1.19 billion francs in in pre-tax profits for the first three months of the year.

The bank said its investment banking business had benefited from a "strong performance" in its fixed income, currencies and commodities business.

It added in its outlook statement that in the current quarter, the securities trading market was expected to be "generally in line with the first quarter, although concerns relating to European sovereign debt provide a basis for some market uncertainty."

The bank's chief financial officer John Cryan said that the group had "hardly any exposure whatsoever to Greece."

"It's immaterial," he stressed.

Cryan pointed out that the group discloses its major exposure to foreign jurisdiction in its annual report, and that "none of Greece, Spain or Portugal appears" in the report.

"We're sleeping very well at night," he added.

Meanwhile, the bank was still unable to stem an outflow during the first quarter, with the net new money outflow reaching 18 billion francs for the period as clients took their assets elsewhere.

However, it was a sharp improvement from a quarter ago, when net outflows reached 56.2 billion francs.

"Net new money outflows are expected to be at relatively moderate levels in the near term, although UBS continues to believe that the steps taken to deal with the root causes of the net outflows will be effective," said the bank.

Cryan said that while the management had taken steps to try to stem the outflows, "we still think that they will take some time to take fruit."

Hurt by losses reaching some 21.29 billion francs in 2008, as well as tax evasion lawsuits in the United States, the bank has been struggling to repair its image over the past year.

© 2010 AFP

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