UBS reported second-quarter net income of 1 billion Swiss francs, or 0.26 Swiss francs per share, vs. net income of 2 billion Swiss francs, or 0.52 Swiss francs per share, missing analysts’ estimates. In the first quarter of 2011, net income was 1.8 billion Swiss francs, or 0.47 Swiss francs per share.
According to the Swiss-based bank, lower revenue across most businesses was caused by the strengthening of the Swiss franc as well as lower trading income in the investment bank’s fixed income, currencies and commodities business.
“Banks’ returns have declined overall in the last 12 months, reflecting deleveraging and the actions being taken in advance of increased capital requirements,” said UBS Group CEO Oswald J. Grübel, in a press release.
“We are responding to this changed environment and the weakening economic outlook by adapting our business and increasing efficiency,” Grübel added. “While our target for pre-tax profit set in 2009 is unlikely to be achieved in the original timeframe, our strong competitive positioning and our capital strength give us confidence for the future.”
The CEO also said, during a conference call and presentation on Tuesday, that the Swiss bank had no intention of selling its U.S. and Latin America wealth-management operations, now led by Bob McCann.
“Most specifically, we believe we must have a leading wealth-management business in the Americas, Asia-Pacific and Europe and Middle East regions, which represent the greatest opportunities for growing our wealth-management franchise, which also means, as I have said before, that our wealth-management business in America is not for sale,” Grübel said. “And I only say that because these rumors keep coming up lately.”
The Wealth Management Americas’ unit had a pre-tax profit of 140 million Swiss francs in the second quarter of 2011, up from 111 million in the first quarter of 2011 and a loss of 67 million Swiss francs a year ago.