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First Quarter Report 2009
May 5, 2009
| At a glance |
Net loss attributable to UBS shareholders was CHF 1,975 million, compared with a net loss of CHF 9,563 million. This change was mainly due to lower losses on risk positions from businesses now exited or in the process of being exited by the Investment Bank. Net loss from continuing operations was CHF 1,852 million compared with a net loss of CHF 9,460 million. |
UBS business divisions and Corporate Center
Wealth Management & Swiss Bank
Pre-tax profit for Wealth Management & Swiss Bank increased to CHF 1,077 million from CHF 535 million. The primary reason for this change was a provision of CHF 917 million booked in fourth quarter 2008 in connection with the US cross-border case. Excluding this provision, profit levels for first quarter would have decreased 26% as less income was earned on a reduced invested asset base and accruals for performance- related compensation increased from a historically low level in fourth quarter 2008 when accruals made in the first nine months of 2008 were partially reversed.
Wealth Management Americas
Wealth Management Americas recorded a pre-tax loss of CHF 35 million compared with a pre-tax loss of CHF 444 million. The result for fourth quarter 2008 was negatively impacted by aggregated auction rate securities (ARS) related charges of CHF 717 million. Excluding these charges, first quarter performance would have weakened from a fourth quarter adjusted pre-tax profit of CHF 273 million. This was due to lower fees related to lower average invested asset levels, a decrease in interest income and an increase in expenses primarily due to higher personnel costs in the first quarter. The previous quarter was mainly influenced by a partial reversal of performance-related compensation accruals made in the first nine months of 2008. In addition, Wealth Management Americas recorded a goodwill impairment charge of CHF 19 million in first quarter 2009 related to the announced sale of UBS Pactual.
Global Asset Management
Global Asset Management’s pre-tax result decreased to negative CHF 59 million from positive CHF 236 million. The loss in the quarter was due to a goodwill impairment charge of CHF 191 million related to the announced sale of UBS Pactual. Without this charge, pre-tax profit would have been CHF 132 million, down 44% from the prior quarter. Increased personnel expenses, which were at a historically low level in fourth quarter 2008, offset a reduction in general and administrative expenses and an increase in operating income.
Investment Bank
The pre-tax result was negative CHF 3,162 million compared with negative CHF 8,096 million. The change was mainly attributable to reduced losses on risk positions from businesses now exited or in the process of being exited and improved performance in the equities business and the rates and emerging markets businesses within the fixed income, currencies and commodities (FICC) business area. This was partly offset by higher operating expenses.
Corporate Center
The Corporate Center’s pre-tax result from continuing operations increased to a profit of CHF 621 million compared with a loss of CHF 3,489 million. This change is attributable to the inclusion in the prior quarter of a charge of CHF 4,118 million resulting from UBS’s transaction with the Swiss National Bank (SNB) compared with a charge of CHF 302 million in first quarter 2009. The impact of the mandatory convertible notes (MCNs) issued on 9 December 2008 was positive CHF 524 million in first quarter 2009 compared with positive CHF 688 million in fourth quarter 2008, largely due to revaluation of the call component of the MCNs. The call component will be re-valued each quarter and UBS expects to record a corresponding fluctuation in the results of the Corporate Center. This fluctuation is subject to the development and expected volatility of UBS’s share price and will continue until the conversion of the MCNs into UBS shares (at the 27 November 2008 extraordinary general meeting, shareholders approved for this purpose the creation of conditional capital in a maximum amount of 365 million shares). Refer to the “Transaction with the Swiss National Bank” sidebar in UBS’s annual report for 2008 for more information. Furthermore, first quarter 2009 results include a gain of CHF 304 million on the buy back of subordinated debt, partly offset by internal funding-related interest charges.
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