UBS net profits drop 76%
Switzerland’s biggest bank, UBS AG, yesterday reported a bigger-than-expected 76 percent drop in net profits during the fourth quarter of last year, a sign of continued struggles linked to its US$2 billion rogue trading scandal and economic weakness in Europe and abroad. Profits at the Zurich-based bank fell to 393 million Swiss francs (US$425 million) in the fourth quarter, compared with the same quarter in 2010 when net profits totaled SF1.29 billion. Those quarterly profits were later increased to SF1.66 billion due to tax gains. Net profit was below the SF658 million consensus estimate by analysts, but Zuercher Kantonalbank’s analysts welcomed a strong increase in UBS’s capital reserves. The investment banking division reported a second consecutive quarterly pre-tax loss of SF256 million, compared with a pre-tax profit of SF100 million in the same quarter of 2010.
Interest rates unchanged
The Reserve Bank of Australia unexpectedly kept interest rates unchanged as two cuts late last year help the economy weather Europe’s debt crisis, sending the nation’s currency soaring to a six-month high. “Much remains to be done to put European sovereigns and banks on a sound footing, but some progress has been made,” Reserve Bank Governor Glenn Stevens said in a statement yesterday announcing the official cash rate target will stay at 4.25 percent, the highest level among the world’s major developed economies. “Financial market sentiment, though remaining skittish, has generally improved since early December.” Stevens’ first rate decision of the year reflects confidence the US and Chinese economies will withstand a European recession and domestic unemployment will stay close to 5 percent as A$456 billion (US$492 billion) in resource projects boost hiring. He also signaled a willingness to lower borrowing costs if conditions warrant an easing of monetary policy.
GM’s sales in China drop
General Motors Co (GM), the world’s biggest automaker, reported its first drop in sales in China in six months as purchases slowed during the weeklong Lunar New Year holiday. Deliveries to Chinese dealers fell 8 percent to 246,654 vehicles last month, from 268,071 a year earlier, the Detroit-based company said in a statement yesterday. This year’s holiday extended from Jan. 23 to Jan. 29 and marked the start of the Year of the Dragon. “People and workers are leaving for their hometowns, families are going on holiday,” said Namrita Chow, Shanghai- based analyst at IHS Automotive. “This reduces the number of people looking to buy cars.”
Apple No. 3 cellphone maker
An outbreak of iPhone fever made Apple the third-hottest mobile phone maker worldwide at the end of last year, according to the International Data Corp (IDC). Apple jumped into the third spot globally from fifth place in the final quarter of the year because of a record-breaking quarter for iPhone shipments, IDC said in figures available online Monday. Apple vaulted over South Korea’s LG and China-based ZTE (中興) in the mobile phone market rankings, IDC said. Nokia remained king, shipping 113.5 million mobile phones in the final quarter of the year to claim nearly 27 percent of the market. Samsung was second with 22.8 percent of the market, or 97.6 million handsets shipped. Apple sold 37.04 million iPhones in the quarter, which ended on Dec.31, giving it a market share of 8.7 percent.