UBS confirms 2B francs net loss for Q1

[May 05, 2009]  ZURICH (AP) -- UBS AG reported a first-quarter net loss of 1.98 billion Swiss francs ($1.73 billion) Tuesday, confirming a warning given last month, and said it remains cautious about its outlook as loan losses are expected to mount amid the economic downturn.

UBS, which replaced its CEO, chairman and several other senior officials after record losses of some 21 billion francs last year, also said customer withdrawals continued in the first quarter.

The Swiss bank has been hit hard by the financial crisis and a U.S. legal probe into its offshore dealings with American clients.

Net loss per share was 0.57 francs compared with a loss of 5.27 francs per share -- or 11.62 billion francs overall -- during the same period last year.

UBS said its investment banking unit recorded a pretax loss of 3.16 billion francs, while its wealth management and Swiss bank unit saw a pretax profit of 1.08 billion francs. The wealth management Americas unit recorded a loss of 35 million francs.

Global asset management made a pretax loss of 59 million francs, blamed on charges related to the sale of its Brazilian unit UBS Pactual.

The bank's corporate center recorded a pretax profit of 621 million francs for the quarter, which it attributed to the purchase of toxic assets by the Swiss National Bank.

UBS said customer withdrawals continued, with outflows in its wealth management and Swiss bank unit totaling 23.4 billion in the first quarter. Global asset management saw withdrawals of 7.7 billion francs, while wealth management Americas saw net inflows of 16.2 billion francs.

Looking ahead, UBS warned that it remains cautious on the immediate outlook, adding that market turmoil continues.

"The strong influence that government policy has on the market environment was clearly demonstrated in the first quarter as investors became less risk averse," the bank said.

"However, the real economy has continued to deteriorate, and this is expected to have negative implications for credit-related provisioning in coming quarters."

Overall, UBS said its total assets fell by 153.49 billion francs to 1.86 trillion francs.

UBS's tier 1 ratio -- which indicates a bank's core equity compared to its risk-weighted assets -- fell to 10.5 percent from 11 percent in the fourth quarter of last year. The bank blamed the drop partly on a re-evaluation of its 2008 figures, which saw it increase its net loss attributable to shareholders by a further 405 million francs.

UBS was recently overtaken as Switzerland's largest bank by market capitalization by its archrival Credit Suisse, which last month reported a 2 billion francs first-quarter net profit.

[Associated Press; By ONNA CORAY]

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