UBS introduces results for the first quarter. Net loss attributable to UBS shareholders reached CHF 1,975 million. Losses driven primarily by risk positions in businesses now exited or in the process of being exited by the Investment Bank.
Results include a CHF 0.6 billion goodwill impairment charge related to the announced sale of UBS Pactual. Net new money outflows totaled CHF 23.4 billion for Wealth Management & Swiss Bank; Wealth Management Americas reported net new money inflows of CHF 16.2 billion; net new money outflows slowed to CHF 7.7 billion in Global Asset Management.
-Capital and balance sheet
BIS tier 1 ratio of 10.5% and BIS total ratio of 14.7% at quarter-end; pro-forma BIS tier 1 ratio of 11.0% including the effect of the announced sale of UBS Pactual. Risks and balance sheet further reduced; total risk-weighted assets under Basel II declined 8.1% during the first quarter to CHF 277.7 billion
-Cost reduction
Cost reduction measures under way; as announced on 15 April 2009, operating expenses expected to decrease by CHF 3.5 to 4 billion by the end of 2010.
-Outlook
There has been an improvement in market sentiment during the first quarter, with a strong rebound in global stock market indices since early March, but the credit markets improved only partly and trading in complex financial products remains illiquid. The markets continue to be unsettled, and UBS remains cautious on the immediate outlook for UBS.
The strong influence that government policy has on the market environment was clearly demonstrated in the first quarter as investors became less risk averse. However, the real economy has continued to deteriorate, and this is expected to have negative implications for credit-related provisioning in coming quarters.
Total operating expenses during the first quarter decreased 1% to CHF 6,528 million from CHF 6,562 million. Higher personnel expenses and a goodwill impairment charge of CHF 631 million related to the announced sale of UBS Pactual were offset by a decrease in general and administrative expenses, as fourth quarter 2008 included provisions related to the US cross-border case and auction rate securities-related charges.
The change in personnel expenses is mainly due to the fact that accruals for performance-based compensation made in the first nine months of 2008 were partially reversed in the fourth quarter, resulting in unusually low personnel expenses in fourth quarter 2008.
L.D.