Europe's second-biggest bank UBS reports 21% drop in Q3 net income

European
Europe's second-biggest bank UBS reports 21% drop in Q3 net income
By Finfacts Team
Oct 31, 2006, 16:31

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UBS headquarters, Zurich, Switzerland

Swiss bank UBS AG, which is Europe's second biggest financial services firm after HSBC, said Tuesday that third-quarter net profit slid 21%, as losses in capital markets hurt its investment-banking business.

UBS said net profit for the quarter fell to 2.2 billion Swiss francs (€1.39 billion; $1.76 billion) from 2.77 billion francs in the year-earlier period.

"We felt the effects of the May and June market correction in the first part of this quarter as sentiment did not really improve until September -- which is why we were not able to match the very strong performance in the first half," Clive Standish, UBS's chief financial officer, said in a statement.

UBS said it is nonetheless on track for a record full-year result, both financially and in terms of strategic progress, helped by a pick-up of market activity in September.

UBS shares fell the most in four years after revenue from stock trading plunged 25 percent and the bank made wrong-way bets in the U.S. Treasury market. UBS and New York-based Citigroup Inc. are the only major banks to report a fall in combined trading and investment-banking revenue in the quarter.

Deutsche Bank will report its third-quarter results tomorrow, analysts estimated and Credit Suisse will report on Thursday.