UBS makes surprise profit despite multi-billion dollar loss
Swiss banking giant UBS surprised analysts this morning with better than expected profits in Q3 despite the high profile trading scandal which cost it CHF1.8bn (£1.3bn).
UBS reported a net profit of CHF1.02bns, down 39% but still well ahead of average analyst forecasts for CHF276m.
The result was in line with the CHF1bn profit it posted in the second quarter of 2011, and comes despite the scandal involving rogue trader Kweku Adoboli.
The unauthorised trades, uncovered in London last month, forced UBS to warn it might have to report a loss for the quarter.
UBS said controls on certain trades had not been working properly, while checks to ensure internal transactions were recorded accurately had failed.
However, it added its wealth management business had held up well despite the scandal, helping boost profits.
Elsewhere in its results statement, UBS warned the outlook for markets is bleak.
In the absence of a resolution of the eurozone debt crisis and improved US economic outlook, it warned “current market conditions and trading activity are unlikely to improve materially, potentially creating headwinds for growth in revenues and net new money.”