The Swiss bank UBS has predicted a net profit in its wealth management business, ahead of announcing its third quarter results on the 25 October.
According to Reuters, the Bank had initially expected a loss in its third quarter, due to the $ 2.3 billion loss, through the activities of the London based trader, Kweku Adoboli. The bank expects similar new net money inflows as it had experience in the second quarter of 2011, where it reported a profit of $ 6.1 billion.
DZ bank analyst, Sabine Bohn, however cautioned that a positive trend, beyond the third quarter could not be assumed, due to the recent financial losses and resignation of the CEO, Oswald Gruebel, who stepped down on the 24 September as a response to the trading scandal. Gruebel was replaced by Sergio Ermotti, who had joined UBS from Unicredit SpA in April this year.
The bank is currently facing major challenges, as it plans to reduce its operational costs by cutting 3,500 jobs and invest 400 million francs into the reorganisation of the bank.
In a statement reported by Reuters, UBS said that it "will continue to invest in growth regions, including Asia Pacific, the Americas, and the emerging markets, as well as in our global wealth management franchise."
UBS put this quarter's profit down to the increase of the bank's credit swaps, but said that the trading scandal would affect its Tier 1 capital ratio, which it expected to drop from 18.1 per cent.