UBS 3rd quarter revenue slumps on low level client activity

08:10, October 27, 2010      

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The UBS AG has announced on Tuesday its third quarter report, registering a CHF 1,664 million (1,711 million U.S. dollars) net profit, a surprising slump from CHF 2,005 million (2,062 million dollars) in the previous quarter.

Commenting on the report, Group CEO Oswald Grubel attributes the decline to "very low levels of client activity as well as a strengthening of the Swiss franc against most major currencies," adding that the appreciation had waved "an impact across all of our businesses."

The investment bank division, which bears the blunt of the slump, saw plunged profits from CHF 1,313 million (1,350 million dollars) in the second quarter to a loss of CHF 406 million (417 million dollars), on reduced flows in equities, mainly in cash and derivative.

Declines were also reported in fixed income, currencies and commodities revenues due to below average client activity in foreign exchange and rates businesses.

The Global Asset Management profits remain stable despite lower management fees as a result of the strengthening of the Swiss franc, partly offset by reduced personnel expenses, said the report.

With the initiation of Basel III and potential capital ratio requirements brewing by the Swiss government, the UBS also reported a slightly increased quarter-end BIS tier 1 capital ratio of 16.7 percent compared with 16.4 percent on June 30, 2010.

Source: Xinhua


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