SWITZERLAND - Swiss financial services giant UBS has beaten analyst expectations having posted posted better than expected first quarter results. UBS reported net profits of CHF1.21bn - an 11% decline on the first quarter a year earlier, but a 35% increase on the previous quarter, excluding writedowns related to the withdrawal of the PaineWebber brand and gains from the sale of Klinik Hirslanden.
UBS said that its results were down to strict cost control measures and strong figures from certain units, including wealth management and investment banking.
It added that any dents in its balance sheet were due to currency moves, mainly the US dollar’s 20% weakening against the Swiss franc during 2002.
“UBS has again delivered robust results in a tough environment,” said Peter Wuffli, president of the group executive board.
“We pushed down our cost/income ratio to its lowest since the middle of 2001 and delivered a higher return on equity than this time last year.”
UBS said that costs remained under tight control. Operating expenses dropped 20% to CHF6.17bn compared to the corresponding period last year - their lowest level since the merger with PaineWebber. But operating income fell 19% to CHF7.77bn.
UBS Global Asset Management posted pre-tax profits of CHF44m, 29% more than the previous quarter. In the institutional business, net new money totalled CHF3.9bn in first quarter 2003, compared to CHF2.4bn in fourth quarter 2002.
Equity mandates experienced strong inflows globally. In its wholesale intermediary fund business, UBS recorded a net inflow of CHF3.4bn in first quarter 2003, compared to -CHF0.8bn in the fourth quarter 2002. Invested assets totalled CHF519bn (CHF533bn : Q4 2002). UBS said that most of its funds continued to show a strong relative investment performance over 1-year, 3-year and 5-year periods
The headcount declined a further 666 to 68,395 since December (70,221 : Q1 2002).
UBS described markets and trading conditions as tough and said they were likely to remain so.
Wuffli added: “While some further degree of volatility cannot be excluded, we do feel that the downward pressure on our industry from the business and market environment could be beginning to ease and that the worst earnings decline might be behind us.
“Our businesses are proving highly competitive and we remain convinced that our strategy is the right one.”
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