Switzerland’s biggest bank UBS, one of the worst-hit by the subprime crisis, said yesterday that it expects a small profit for the third quarter after sharply cutting its US mortgage-related positions.
Chairman Peter Kurer told shareholders during an extraordinary general meeting later yesterday that the bank would also earn profits next year, a statement said.
UBS last year posted its first ever full-year loss of 4.4 billion Swiss francs (US$3.9 billion) because of massive asset write-downs of subprime-related positions.
This year, it has already posted losses in two successive quarters. The subprime crisis has forced the bank to write down over US$42.5 billion in assets so far.
With the financial crisis in the US taking a turn for the worse over the past two weeks, some analysts had expected UBS to post further write-downs when it reports its third quarter results on Nov. 4.
But the bank expects a recovery.
“Despite recent extremely volatile market conditions, UBS currently expects to report a small profit for the third quarter, based on preliminary estimates,” a statement summarizing Kurer’s address to shareholders said.
The bank had disposed of much of its US commercial and residential mortgage-related positions, it added. It has also embarked on a program to reposition itself and take remedial measures following the crisis, including the way it apportions risks.
“2009 will be an overall profitable year. UBS, at all times, wants to maintain a strong capital base, adequate liquidity and a reduced, solid balance sheet,” the UBS statement said.