Further losses at UBS Capital

The private equity arm of the Swiss bank has reported a SFr519m pre-tax loss for the second quarter.

UBS Capital, the private equity division of Swiss bank UBS, has reported a pre-tax loss of SFr519m (E355m) for the second quarter of 2002. In Q1, the group had announced a minus of SFr462m on the Q1 results.

Speaking at the firm’s results presentation, UBS chief communications officer Mark Branson said the bank anticipated a further decline in UBS Capital’s performance ‘for the next few quarters’.

UBS Capital attributed the division’s poor performance to the continuing weakness of world markets and a virtual disappearance of profitable divestment opportunities. The level of UBS Capital’s private equity investments fell to SFr3.9bn on 30 June 2002 from SFr4.8bn on 31 March 2001. The division did achieve one successful exit during the quarter, from Sime Diamond Leasing of Singapore. 

The fair value of the portfolio at the end of Q2 was SFr4.9bn, down from SFr5.4bn in Q1. Undrawn commitments decreased from SFr3.2bn to SFr2.6bn during the quarter.

The UBS Capital division is continuing to focus on a strategy, first announced last November, to maximise the value of the firm’s current portfolio. The decision was announced after the division reported a SFr112m loss for Q3 2001.

As a whole, the bank reported better than expected results, with pre-tax profits for Q2 down only two per cent on the Q1 figures at CHF1.3bn.