Switzerland's biggest bank UBS today said that it would swing into profit in the third quarter, recovering from successive quarters of losses when it was forced to write down billions in bad assets.
UBS last year posted its first-ever full-year loss, followed by two successive quarters of losses this year, as it had to write down over $42.5 billion worth of sub-prime related assets when the financial market crisis set in.
With the financial turmoil in the US taking a turn for the worse over the past two weeks, some analysts had expected UBS to post further writedowns when it reports its third quarter results on November 4. But the bank said it expects a recovery.
'Despite recent extremely volatile market conditions, UBS currently expects to report a small profit for the third quarter, based on preliminary estimates,' a statement summarising Chairman Peter Kurer's address to shareholders said.
The bank, whose shares have been wildly volatile in recent weeks, would also make profits in 2009, Kurer told shareholders during an extraordinary general meeting.
Kurer underlined the bank's commitment to making the bank profitable again. UBS had disposed of many of its US commercial and residential mortgage-related positions, Kurer said.
'Risk positions on our balance sheet have been written down, closed out or sold. Headcount and operating costs are in the process of being reduced,' he said.
