Swiss banking giant UBS today reported a net profit of 2 billion francs (€1.5 billion) for the second quarter, almost double analysts' expectations.
Switzerland's biggest bank issued a muted outlook, however, saying that concerns over the sustainability of the global economic recovery could result in continued market volatility, thereby leading to less client activity. Analysts had forecast a profit of 1.1 billion francs for the April to June period this year.
The bank's earnings marked a turnaround from a loss of 1.4 billion francs reported during the same time last year, and marked its third profitable quarter running after colossal losses incurred during the financial and economic crises.
Its earnings were lifted this quarter by its wealth management and Swiss bank division, as well as investment bank unit, both of which posted over a billion in pre-tax profit.
'This was a good result in volatile market conditions, and demonstrates the progress we are making as we move towards our mid-term targets,' said Oswald Gruebel, chief executive of the Zurich-based bank.
The bank also reported that a problem with an outflow of funds was easing. During the quarter, net new money outflow was reduced to 4.7 billion francs, compared to 18 billion francs in the first quarter.
Due to uncertainties arising over a tax evasion lawsuit filed by the US as well as a loss in client confidence after losses during the financial crisis, the bank had recorded a sharp increase in net new money outflows as clients took their assets elsewhere.
UBS said today that it expects to 'achieve a comprehensive resolution of all outstanding matters with the US government related to the US cross-border business by October 2010.'
This was made possible after the Swiss parliament in June approved a landmark accord between the US and UBS, allowing the bank to pass on data on some US clients to the country's tax authorities.
