Swiss bank UBS AG reports earnings for the third quarter on Tuesday. The following is a summary of key developments and analyst opinion related to the period.
Swiss bank UBS AG reports earnings for the third quarter on Tuesday. The following is a summary of key developments and analyst opinion related to the period.
OVERVIEW: Unlike some of its U.S. and European rivals, UBS has struggled return to profit this year despite overhauling top management, cuting jobs and sharply reducing its portfolio of risky investments.
Chief executive Oswald Gruebel, who was hired in March following record losses of 21 billion francs last year, has already presided over one loss-making quarter and analysts are predicting UBS will end the third in the red as well.
Still, the bank appears to have resolved a damaging legal dispute with U.S. authorities over allegations it helped thousands of Americans evade taxes, paving the way for it to regain much-needed investor and customer confidence.
BY THE NUMBERS: UBS lost 1.4 billion Swiss francs ($1.3 billion) in the second quarter, down from 2 billion francs in the first.
The bank said in September that its third-quarter results would again be affected by "one-off items" that could wipe hundreds of millions of francs off the balance sheet.
UBS is close to meeting its target of a 10 percent cut in work force, or about 8,700 jobs worldwide.
Meanwhile it has agreed to disclose the names of 4,450 American clients believed to be hiding assets from U.S. authorities. Many more could voluntarily give themselves up to the Internal Revenue Service, costing the bank a large slice of its U.S. deposits.
ANALYST TAKE: UBS has prepared investors for another loss-making quarter, says Manfred Hofer, an analyst at Liechtenstein's LGT bank.
"The losses should be significantly lower than in the previous quarter, partly thanks to positive developments on the financial markets," says Hofer.
But cross-town rival Credit Suisse Group is sure to have the upper hand once again, having posted a net profit of 2.4 billion Swiss francs ($2.4 billion) for the third quarter, he says.
Peter Thorne, an analyst at Helvea, predicts a third-quarter loss for UBS of 915 million francs ($893 million).
WHAT'S AHEAD: With market conditions improving and the U.S. court case out of the way for the time being, UBS is set to see its fortunes improve provided it can win back customers and investors. Analysts will be watching out for new initiatives aimed at boosting the investment banking business and getting wealthy customers to once again put more money into UBS than they are taking out.
STOCK PERFORMANCE: Shares rose 44 percent in the quarter to 18.97 francs.
