Profits at UBS down over 50%

Profits at UBS more than halved in the first quarter following a 1.16 billion Swiss franc (€979 million) charge on its own debt.

The Swiss bank struck a cautious note for the second quarter, saying economic worries rattling wealthy clients such as the euro zone debt crisis, concern over Europe's banks and the US deficit are likely to take a toll.

"Failure to make progress on these key issues would make further improvements in prevailing market conditions unlikely and would have the potential to continue the headwinds for revenue growth, net interest margins and net new money," UBS said in a statement.

The bank voiced confidence its flagship private banking arm would still attract fresh assets, a key bellwether for future revenue.

UBS, which announced in November it would scale back its investment bank business to focus on private banking, said it is on track to achieve its target of CHF 2 billion (€1.66 billion) of cost savings by the end of 2013.

The bank cut risk-weighted assets by roughly 30 billion Swiss francs (€25 billion) in the quarter, putting it ahead of its reduction target for this year.

Net profit fell to 827 million Swiss francs (€688 million) from 1.807 billion (€1.49 billion) a year earlier. Last week, Credit Suisse reported a meagre profit for the quarter amid a better-than-expected showing from its fixed income division.

Reuters