Despite Strong Profits, UBS Cautious On 2006

The Swiss bank UBS enjoyed a 47 per cent rise in profits for the second quarter, thanks to increased fees from its wealth management business, serving its richest clients. Net profits were recorded at $2.54 billion, beating analysts' estimates and

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The Swiss bank UBS enjoyed a 47 per cent rise in profits for the second quarter, thanks to increased fees from its wealth management business, serving its richest clients. Net profits were recorded at $2.54 billion, beating analysts’ estimates and turning 2006 into a successful year so far for Europe’s second largest bank.

However, despite recent development in its asset management business through expansion and acquisitions, UBS was cautious about performance over the rest of the year, resulting in a fall in its share price. “Our performance was strong – and achieved despite the market reversal in the middle of May,” says UBS chief financial officer Clive Standish. “Recurring income continued to benefit from the high levels of invested assets. [However] growing geopolitical concerns, combined with worries about the pace of future economic growth… continued to affect investor activity and invested asset levels. This could indicate a return to a more normal seasonal pattern for financial firms, where a strong start to the year is followed by softening performance in the second half.”

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