UBS Falls after Reporting Weak Numbers

Shares of UBS AG (NYSE: UBS) are falling more than 2% in morning trade after the company reported quarterly profits that fell well below analyst estimates. The bank said fourth-quarter net profit shrank to 393 million Swiss francs from 1.66 billion francs in the 2010 period. The results are significantly below analyst consensus forecasts of 737 million Swiss francs.

CEO Sergio P. Ermotti said: “More than ever, our clients demand safety, stability and the best investment advice to steer them successfully through turbulent markets. We are uniquely positioned to deliver exactly this. We continue to strengthen our capital, putting us ahead as the industry as a whole builds towards new capital requirements, and we place clients at the very center of everything we do, with comprehensive products and services tailored solely to their needs. Making the best possible use of these clear competitive advantages will enable us to provide attractive and sustainable returns to our shareholders.”

UBS financial head Tom Naratil said uncertainty in the eurozone was doing more to dampen activity by wealthy clients than the trading scandal: “The trading incident is not something clients are talking to us about today.”

Kepler Capital Markets analyst Dirk Becker welcomed the reduction in risky assets but said there were still questions over the future of the investment bank. “Revenues have recovered from the really poor Q3 levels, but are still too low to feed a division with still over 17,000 employees,” he said. “The downsizing plans of the management will reduce this revenue base further and make it impossible to achieve satisfactory returns for this division, which will still consume the largest part of the capital.” He added.

“The investment bank clearly did better than feared with better than expected revenue streams, however, wealth management clearly suffered from weak client activity,” said Vontobel analyst Teresa Nielsen.

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Post Written By: Ed Liston Ed Liston is a senior contributing editor at TheStockMarketWatch.com. An active market watcher and investor, Ed guides an independent team of experienced analysts and writes for multiple stock trader publications. He is widely quoted in various financial publications on the Internet. When Ed is not writing about stocks, investing in stocks, talking about stocks, or otherwise doing something stock related, he likes to go sailing and fishing in his yacht.