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Second Quarter Report 2009
Aug. 4, 2009
| At a glance |
Net loss attributable to UBS shareholders was CHF 1,402 million compared with CHF 1,975 million. This was mainly driven by lower losses on risk positions from businesses now exited or in the process of being exited by the Investment Bank. Second quarter results were significantly affected by a charge of CHF 1,213 million on own credit for financial liabilities designated at fair value, restructuring charges of CHF 582 million and goodwill impairment charges of CHF 492 million in relation to the announced sale of UBS Pactual. Net loss from continuing operations was CHF 1,115 million compared with a net loss of CHF 1,852 million. |
UBS business divisions and Corporate Center
Wealth Management & Swiss Bank
Pre-tax profit for Wealth Management & Swiss Bank decreased to CHF 932 million from CHF 1,077 million. The primary reason for this change was charges of CHF 321 million recorded in second quarter 2009 in connection with the restructuring of the business. Excluding these charges, profit levels for the second quarter would have increased 16% as credit loss expenses and personnel expenses were strongly reduced in the second quarter.
Wealth Management Americas
Wealth Management Americas recorded a pre-tax loss of CHF 221 million compared with a pre-tax loss of CHF 35 million. The second quarter included restructuring charges of CHF 152 million, whereas the first quarter included a goodwill impairment charge of CHF 19 million related to the announced sale of UBS Pactual. Excluding these charges, the pre-tax loss for second quarter 2009 would have been CHF 69 million compared with a first quarter pre-tax loss of CHF 16 million. Furthermore, the quarter was negatively impacted by a special assessment levied by the US Federal Deposit Insurance Corporation (FDIC) on the assets of every FDIC-insured depository institution, including UBS Bank USA in the amount of CHF 17 million, to ensure that the FDIC Deposit Insurance Fund retains a positive balance. As part of the business division's restructuring efforts, the number of personnel was reduced by 9% from the prior quarter.
Global Asset Management
Global Asset Management's pre-tax result was a profit of CHF 82 million compared with a loss of CHF 59 million. Excluding a goodwill impairment charge in the first quarter of CHF 191 million in relation to the announced sale of UBS Pactual and restructuring charges in both quarters, pre-tax profit would have decreased by CHF 30 million, or 22%. Increased performance fees were more than offset by higher personnel expenses.
Investment Bank
The pre-tax result was negative CHF 1,846 million compared with negative CHF 3,162 million. The change was driven by lower losses on risk positions from businesses now exited or in the process of being exited - this includes areas such as the municipal securities, fixed income proprietary trading, real estate and securitization and complex structured products businesses. An own credit charge of CHF 1,213 million on financial liabilities designated at fair value was included in the second quarter result, compared with a gain of CHF 651 million in the first quarter. The equities and investment banking businesses saw increased revenues as they capitalized on improved market sentiment with increased activity in equity markets. However, underlying sales and trading revenues in the fixed income, currencies and commodities (FICC) area were weak as the business was being rebuilt following significant voluntary and involuntary staff turnover and management changes. Additionally, the deployment of resources to FICC reflected a conservative view on risk taking. Operating expenses were down from the prior quarter.
Corporate Center
The Corporate Center's pre-tax result from continuing operations declined to negative CHF 270 million from positive CHF 621 million. The decline was primarily due to a goodwill impairment charge of CHF 492 million made in the second quarter in relation to the announced sale of UBS Pactual. This goodwill impairment charge was allocated to the Corporate Center through the "Services (to) / from other business divisions" line item. Refer to the "Recent developments" section of this report for more information.
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