Switzerland’s largest bank UBS has declared it quarterly results for the quarter ended December 2011. The company’s profits have fallen 76 percent due to loss in trading brokerage and also a ripple effect of the Greece crisis. The bank said fourth-quarter net profit shrank to 393 million Swiss francs ($425.95 million) from 1.66 billion francs in the 2010 period and compared with a forecast for 737 million.
“Traditional improvements in first-quarter activity levels and trading volumes may fail to materialize fully, which would weigh on overall results for the coming quarter, most notably in the investment bank,” UBS said on Tuesday.
Deepening Euro crisis and a decrease in revenue through brokerage has affected investment banks across the globe. Clients even pulled out money raising concerns over liquidity for banks. Company’s such as goldman sachs and jp morgan also had to face a steep decline in revenues. UBS, which announced in November it, would scale back its investment bank business to focus on its flagship private bank. The company currently has non performing assets of almost 20 percent.
However the bright spot for the company has been the recovery of revenues. Revenues have increased considerably over the previous quarter. The company also stated that a few segments have performed well in its investment bank, including foreign currency trading, short- and long-term rates and cash equities in Asia-Pacific. The unit, hit by a $2 billion rogue trader scandal uncovered in September, pared its pretax loss to 256 million from a loss of 650 million the previous quarter.
We maintain a buy on the stock as the company plans of restructuring have been bearing fruit. We maintain a time frame of ten months on the stock with buy at current levels.