Switzerland's biggest bank UBS AG on Wednesday, May 2, reported a 54 percent drop in first-quarter net profit for 2012, mostly due to an accounting loss on its own debts as well as difficult market conditions, according to The Associated Press.
But the bank reported a "partial recovery" in client activity levels, including investment from the wealthy, that has helped it come back from a scandal last September, when a trader was arrested on charges of committing fraud that cost the bank over $2 billion.
A more detailed look at the figures shows that the company's net profit in the January-March quarter fell to 827 million francs ($910 million) from 1.81 billion francs compared with the same period last year. Revenue also fell 22 percent to 6.53 billion francs, down from 8.34 billion francs.
The company said its first-quarter profit was saddled by a 1.16 billion francs ($1.28 billion) accounting charge on the bank's own credit due to the rising value of the bank's own bonds.
"Failure to make progress on these key issues would make further improvements in prevailing market conditions unlikely and would have the potential to continue the headwinds for revenue growth, net interest margins and net new money," the bank reported.
It was just the second quarter for the bank under the leadership of Chief Executive Office Sergio P. Ermotti, who took over in September with the aim of restoring clients' trust following a case of alleged rogue trading in its investment bank that cost UBS $2 billion.
Former UBS trader Kweku Adoboli has pleaded not guilty to two counts of fraud and two counts of false accounting between 2008 and 2011. Ermotti has pledged to tighten oversight at UBS and restructure the ailing investment banking unit where the trading scandal occurred.
Last month, the specter of a damaging tax evasion case rose again. After resolving a long-running tax probe in the United States with a $780 million fine and the handover of thousands of client files, UBS now faces allegations by former staff in France that it also helped French clients cheat on their taxes.
The bank strenuously denies the allegations and says it will defend itself using "appropriate legal means."
