Switzerland's largest bank UBS has reported a 79% increase in second quarter net profits, but has also warned of the likelihood of a dip in profits over the coming months due to turbulent financial markets.
Second quarter net profit reached 5.62 billion Swiss francs (€3.4 billion), helped by the sale of a stake in private bank Julius Baer.
But UBS voiced caution about the rest of the year and highlighted problems with fixed income markets, including lower revenues in the US mortgage securities market that contributed net losses of about 230 million Swiss francs.
UBS predicted weak trading results from investment banking if the current 'turbulent conditions' prevailed through to autumn. 'This makes it likely that profits in the second half of 2007 will be lower than in the second half of last year,' the bank said.
UBS said it had completed the closure in May of the troubled US hedge fund, Dillon Read Capital Management (DRCM), it set up in 2006.
