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UBS reported 39% profit decrease for Q3 2011

UBS AG, the largest Swiss bank, said its profit decline for the third quarter of 39%, taking into account losses of 2.3 billion USD in unauthorized trading in September. In the third quarter net profit of the bank fell to 1.02 billion Swiss francs (1.16 billion USD) from 1.66 billion francs for the same period last year, said in a statement on the Zurich-based institution. The average forecast of 11 analysts, was for earnings of 318 million francs, having earlier this month, UBS announced that revaluation gains on own debt to the bank and sales on own account will soften the losses from unauthorized Trade will lead to "moderate" profit for the quarter. UBS, which in August announced it would cut 3500 employees, plans to shrink its investment banking and direct more resources to fund the management of capital - a step that President Casper Viligar bank described as a "paradigm shift". In October, Finance Director Tom Naratil said that "economic uncertainty" has forced the bank's clients to trade less during the quarter and falling stock markets reduced the value of managed assets.
"The environment has deteriorated", said Qian Abuhoseyn, a London-based analyst at JPMorgan Chase & Co. "We see a much lower activity caused by uncertainty in the markets. Banks that are pressed, the first to revise their strategies".
UBS announced that its investment bank reported a loss before tax of 566 million francs (excluding accident with unauthorized trading and profits in its own debt), compared with a loss of 19 million francs a year earlier due to the strong franc lower earnings in all sectors and "severe market conditions".
"Prospects for global economic growth remain a function of the outcome of the debt crisis in the euro area, calming fears about the banking sector, economic growth in the U.S., unemployment and USD budget deficit", says Bank. "If these issues have been resolved, current market conditions and trading activity is unlikely to improve significantly". The losses from investment banking at UBS were accumulated from losing positions in futures on the Standard & Poor's 500, DAX and EuroStoxx and led to the resignation of the CEO Oswald Gruebel and several directors of departments.