Switzerland’s UBS AG has announced pre-tax profits of SFr7bn (E5bn) in 2001, down from SFr10bn in 2000, after its private equity arm wrote down investments and reported an operating pre-tax loss of just over SFr1bn.
UBS Capital blamed poor market conditions and a lack of divestment opportunities for the losses. In 2000, the division posted profits of SFr173m. The company has warned investors to expect continued market uncertainty and net losses in 2002.
Taken as a whole, UBS’s results are better than expected and compare favourably with those predicted by rival Credit Suisse which anticipates a 70 per cent fall in profits. UBS's results also compare favourably with those of Deutsche Bank, which recently announced a 67 per cent drop in underlying 2001 net income to E1.4bn.
UBS attributed the better-than-expected results to reduced credit losses, tight control of personnel expenses, a lower tax rate and a record contribution to profit from private banking.