The company reported first quarter net profit attributable to shareholders of CHF 827 million ($910 million) or CHF 0.22 per share, up from CHF 319 million or CHF 0.08 per share in the prior quarter. However, earnings were down from CHF 1.8 billion or CHF 0.47 per share in the prior-year quarter.
The quarter’s results at UBS AG were impacted by an own credit loss, a debit valuation adjustment loss on its derivatives portfolio, a reduction in personnel expenses related to changes to the Swiss pension plan and restructuring charges.
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Excluding such items, UBS AG’s operating profit before tax increased by CHF 1,411 million sequentially to CHF 2,162 million, primarily reflecting higher operating income. Net new money inflows in the wealth management businesses more than doubled to CHF 10.9 billion.
UBS AG’s operating income advanced 11% from the prior quarter to CHF 6,525 million while operating expenses fell 3% sequentially CHF 5,221 million. Restructuring charges in the reported quarter were CHF 126 million, substantially up from CHF 10 million in the prior quarter.
Notably, UBS AG experienced a 70% sequential increase in operating profit before tax in the Wealth Management division. Retail and Corporate division’s operating profit before tax advanced 40% while that of Wealth Management Americas and Global Asset Management augmented 32% each from the prior quarter.
Excluding an own credit loss of CHF 1,103 million, the Investment Bank division at UBS AG recorded a pre-tax profit of CHF 730 million in the reported quarter, significantly up from CHF 99 million in the prior quarter. Results reflected higher revenues across all business areas in the backdrop of improved market conditions.
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By GlobalDataWealth Management’s net new money more than doubled to CHF 6.7 billion on solid inflows in Asia Pacific, emerging markets and Switzerland, as well as globally from ultra high net worth clients. Also, net new money at Wealth Management Americas more than doubled to USD 4.6 billion.
UBS AG’s invested assets were CHF 2,115 billion as of March 31, 2012, up from CHF 2,088 billion as of 31 December 2011, as a result of the positive market performance. However, this was partly offset by the depreciation of the U.S. dollar against the Swiss franc. Moreover, the company experienced a net reduction of CHF 17 billion from the sale of parts of the CHF 25 billion of invested assets which was obtained from ING Investment Management in Australia in the fourth quarter.
UBS AG experienced an increase in regulatory capital. Its Basel 2.5 tier 1 capital increased by CHF 1.2 billion during the first quarter. The company also reduced Basel 2.5 risk-weighted assets by CHF 30 billion to CHF 211 billion. This resulted in an improvement of 280 basis points in its Basel 2.5 tier 1 capital ratio that advanced to 18.7% from 15.9% as of December 31, 2011.
However, as of March 31, 2012, balance sheet assets stood at CHF 1,366 billion, CHF 53 billion lower than on December 31, 2011, as a result of to market-driven and exposure decreases in positive replacement values.
