Net loss attributable to UBS shareholders was CHF 1,975 million, compared with a net loss of CHF 9,563 million in fourth quarter 2008. This change was mainly due to lower losses on risk positions from businesses now exited or in the process of being exited by the Investment Bank. Net loss from continuing operations was CHF 1,852 million compared with a net loss of CHF 9,460 million.
Total operating income increased to CHF 4,970 million from negative CHF 4,696 million. This was driven by lower trading losses with a trading income of negative CHF 630 million compared with negative CHF 9,132 million. Net interest income increased to CHF 1,899 million from CHF 1,655 million. UBS recorded a credit loss expense of CHF 1,135 million in first quarter 2009, compared with 2,310 million in fourth quarter 2008. Net fee and commission income was CHF 4,241 million, down 11% from CHF 4,784 million. First quarter 2009 saw a decrease in all major fee categories with the exception of underwriting fees. Other income increased to CHF 595 million from CHF 306 million.
Total operating expenses 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.
Business division performance: 1Q09 vs 4Q08
Wealth Management & Swiss Bank recorded an increase in pre-tax profit to CHF 1,077 million from CHF 535 million. This increase was largely due to the impact of provisions made in connection with the US cross-border case in fourth quarter 2008. Without the effect of these provisions, pre-tax profit would have fallen 26% as less income was earned on a reduced asset base and operating expenses were higher.
Wealth Management Americas recorded a pre-tax loss of CHF 35 million compared with a pre-tax loss of CHF 444 million. Excluding the auction rate securities (ARS) related charges recorded in fourth quarter 2008, first quarter 2009 results decreased from an adjusted pre-tax profit of CHF 273 million in fourth quarter 2008, due to both lower revenues and higher operating expenses.
Global Asset Management pre-tax profit decreased to negative CHF 59 million from positive CHF 236 million, mainly due to a goodwill impairment charge of CHF 191 million related to the announced sale of UBS Pactual. Revenues were higher, mainly due to higher performance fees and lower operational losses.
The Investment Bank recorded a pre-tax loss of CHF 3,162 million compared with a pre-tax loss of CHF 8,096 million. First quarter 2009 saw an increase in revenues in most client-facing activities, notably in equities and the rates and emerging markets businesses within the fixed income, currencies and commodities (FICC) business area. Losses on risk positions from businesses the Investment Bank has now exited or is in the process of exiting were lower than in the prior quarter. Credit valuation adjustments against credit default protection from monolines totaled CHF 1.9 billion in first quarter 2009. The Investment Bank continued to reduce risk in businesses it is exiting and, as a result, experienced losses on disposals. Lower marks and credit valuation adjustments also contributed to losses in the quarter. Trading losses were also incurred in the management of counterparty risk in over-the-counter (OTC) derivatives portfolios. First quarter 2009 included losses related to ARS purchase commitments (CHF 0.3 billion) and price adjustments on positions transferred to the SNB StabFund (CHF 0.2 billion). Credit loss expenses were CHF 1,017 million in the first quarter. Own credit gains of CHF 651 million were recorded in the quarter. Operating expenses were up from the prior quarter due to higher personnel expenses and a goodwill impairment charge of CHF 421 million related to the announced sale of UBS Pactual.
The Corporate Center recorded a pre-tax profit from continuing operations of CHF 621 million in first quarter 2009, due mainly to the net impact of the transaction with the Swiss National Bank (SNB) and the valuation of the mandatory convertible notes (MCNs) issued on 9 December 2008. First quarter results also include a gain of CHF 304 million on the buyback of subordinated debt. In comparison, a pre-tax loss from continuing operations of CHF 3,489 million was recorded in the fourth quarter, with the impact of the SNB transaction only partly offset by the fair valuation of the abovementioned MCNs.
UBS
Date: 13.05.2009
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