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29th July 2011

UBS result

UBS reported Q2 net attributable of CHF 1,015m (€873m £770m $1,263m ¥98.6bn Y8,137m) and half year of CHF 2,822m (€2,426m £2,141m $3,511m ¥274.2bn Y22,624m) DOWN 49% and 33% respectively.

The good news from the accounts is that net interest income both before and after the inclusion of credit loss expenses is up significantly - up 32% and 11% before credit losses. Even more important is the FALL in total operating expenses DOWN 16% and 9% respectively.

The bad news is the collapse of the non-interest income, DOWN 30% in Q2 and 19% for the half year. Trading income is down by one half in Q2 and Q2 is DOWN 22% compared with Q1. Although it had been no secret that UBS FICC was not doing well the extent to which it has fallen raises serious questions. Some have questioned the degree tow which this is policy, and some have welcomed the reduction from the business considered higher risk. The bank denies it wants to stop or has a plan to reduce significantly this business. The danger is of a continued spiral where the failing in FICC and other investment banking businesses encourages more to leave the bank and hence worsens the situation. The situation is worsened if some of the key investment bankers are not entirely sure of the true support from the CEO and Chairman, which is suggested may be the case.

The bank reported an inflow in Net New Money of CHF8.7bn.


Income summary Q2 Change* Half yr Change*
CHFm % CHFm %
Continuing operations
Interest income 4,880 0 9,457 -2
Interest expense -3,440 -9 -6,236 -8
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Net interest income 1,440 32 3,221 11
Credit loss (expense) / recovery 16 -- 19 -72
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NII after credit loss expense 1,456 39 3,240 9
Net fee and commission income 3,879 -11 8,119 -7
Net trading income 1,724 -50 3,928 -32
Other income 112 -65 228 -65
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Total operating income 7,171 -22 15,515 -15

Personnel expenses 3,925 -16 8,332 -9
General and administrative expenses 1,408 -14 2,896 -5
Depreciation of property and equipment 161 -37 352 -28
Amortization of intangible assets 22 -29 46 -21
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Total operating expenses 5,516 -16 11,626 -9

Operating profit - continuing operations 1,654 -37 3,889 -28
Tax expense / (benefits) 377 21 803 -12
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Net profit from continuing operations 1,277 -45 3,086 -32
Net profit from discontinued operations 1 0 1 -50
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Net profit 1,278 -45 3,087 -32
Non-controlling interests 263 -45 265 -13
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Attributable to UBS shareholders 1,015 -49 2,822 -33

Operating Profit by divisions
Wealth Management 672 2 1,318 -3
Retail & Corporate 421 -11 824 -12
Wealth Management & Swiss Bank 1,094 -3 2,142 -7
Wealth Management Americas 140 -- 252 -52
Global Asset Management 108 -8 231 -9
Investment Bank 376 -71 1,211 -52
Corporate Center -63 53 425 -88
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Operating profit - continuing operations 1,654 -37 3,889 -28

* change compared with respective period in 2010
-- Not possible to calculate usually because of one positive and one negative number