UBS reports results for second quarter 2001: Net profit after tax CHF 1,385 million.
UBS reports a net profit after tax of CHF 1,385 million, down 9% compared to the previous quarter and 26% compared to second quarter 2000, once adjusted for goodwill amortization and significant financial events*. The Group's core businesses have delivered stable revenues despite unfavourable market conditions, and continue to improve their competitive position. Net new money flow of CHF 24 billion (CHF 45 billion for the half-year) was positive across all businesses.
In the second quarter 2001, UBS achieved a net profit after tax of CHF 1,385 million, 9% lower than first quarter 2001 once adjusted for goodwill amortization, and 12% down on a reported basis. Revenues proved stable, thanks to strong client franchises and a diverse business mix, declining by just 2% from first quarter 2001 to CHF 9,881 million.
Compared to the strong second quarter last year, net profit after tax was 26% lower once adjusted for significant financial events* and goodwill amortization, or 33% lower on a reported basis. About half of the decline in adjusted net profit was attributable to the performance of UBS Capital, which recorded a loss of CHF 351 million.
These results come against a backdrop of slowing economic growth in the major economies and uncertainty in securities markets, in contrast to the relatively favourable conditions of second quarter 2000.
Record levels of underwriting fees, portfolio management fees and investment fund fees helped to bring fee and commission revenue to an all-time high of CHF 5,375 million, representing 54% of the Group's revenues. Costs remain under tight control, with an increase of only 2% from first quarter 2001. Cost discipline ensures that scope remains for selective investment in strategic initiatives.
"Although these are tough markets, our core businesses remain in good health," said Luqman Arnold, President of the Group Executive Board. "During this quarter we have gained market share in key areas, and attracted significant new client assets to our wealth management businesses."
Net new money of CHF 24 billion brings the Group total for the year to CHF 45 billion, and total invested assets to CHF 2.56 trillion. Net new money in the private client units rose to CHF 17 billion from CHF 11 billion in the preceding quarter. UBS Asset Management achieved positive net new money in its institutional business (CHF 5 billion) for the first time since 1998, endorsing its successful investment performance.
Performance against Group financial targets:
Pre-goodwill amortization and adjusted for significant financial events:
Annualized return on equity for the first half of 2001 was 16.8%, within the target range of 15-20%. The fall since first half 2000 reflects the very strong returns achieved in more buoyant markets in 2000, and the higher average equity in 2001 due to share issuance to fund the PaineWebber merger.
Basic earnings per share this quarter were CHF 1.37, a decline of 31% from second quarter 2000, but just 9% from first quarter 2001, reflecting relatively stable performance in difficult market conditions.
The cost/income ratio in second quarter 2001 was 77.2%, compared to 69.2% in second quarter 2000. Cost control remains a strong focus, with comparable costs below second quarter 2000 levels, the increase resulting from the addition of UBS PaineWebber.
Market conditions remain difficult to assess and, the chances of a short-term improvement in the operating environment seem low. Given that the summer months often see less activity, immediate prospects remain challenging. However, the competitive gains across UBS's businesses are encouraging. "We remain cautious and disciplined, given the uncertain outlook, but we are taking every opportunity we can to ensure our businesses come out of the market downturn stronger and better positioned than they went in," commented Luqman Arnold.
Full Media Release:
Given information include:
2Q 2001 Report (pdf and interactive version)
2Q 2001 Results slide presentation
Webcast: The results presentation by Luqman Arnold, President, UBS AG, will be webcast live via www.ubs.com at the following time on Tuesday, 14 August:
Webcast playback will be available from 1400 CET on Tuesday, 14 August, with a bookmarked version at 1800 CET the same day.
Zurich/Basel, 14 August 2001
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Further information on UBS's quarterly results is available in the Investors & Analysts section.
Zurich/Basel, 14 August 2001