UBS Turns Profitable In Q1; Beats Forecasts

UBS (NYSE: UBS) Tuesday announced that it has swung to profits in the first quarter, aided by strong recovery in its investment bank. UBS’ investment arm has returned to health after writing off over $50 billion during the financial crisis.

The Swiss banking giant said it has made 2.2 billion Swiss francs ($2 billion) of profits in the first three months of the year. Strong fixed-income trading revenues and higher-than-expected wealth management margins helped the bank exceed the forecasts made by analysts. UBS’ revenues for the quarter jumped 81% to 9.01 billion francs, from 4.97 billion francs.

UBS boss Oswald Gruebel said that his strategy to regain clients' trust seemed to be showing results as withdrawals have slowed to about 18 billion francs in wealth and asset management, from 56 billion in the last quarter. Gruebel expects the withdrawals to remain "at relatively moderate levels in the near term".

The company was more confident in its outlook than it was in the previous quarters and said that it expected "gradual" improvement in private banking and asset management. UBS said, "Net new money outflows are expected to be at relatively moderate levels in the near term, although UBS continues to believe that the steps taken to deal with the root causes of the net outflows will be effective."

UBS’ share price fell 2.43% in the pre-market trading session.

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