UBS narrows quarterly loss after write-downs

Posted May 5th 2009 8:16AM by Mark Fightmaster
Filed under: Before the Bell, Earnings Reports

This morning, Swiss bank UBS (NYSE: UBS) reported a first-quarter loss of roughly $1.75 billion, adding a warning that bad-debt charges could increase. UBS's loss of 1.98 billion Swiss francs was far better than the 11.62 billion Swiss francs that the bank lost a year ago.

While UBS saw improved sentiment during the quarter, the bank remains cautious about its immediate outlook, noting, "The strong influence that government policy has on the market environment was clearly demonstrated in the first quarter as investors became less risk averse. However, the real economy has continued to deteriorate, and this is expected to have negative implications for credit-related provisioning in coming quarters."

UBS's capital came in better than the firm forecast a month ago. At the end of March, UBS's Tier 1 capital ratio was 10.5% - which was down from 11% last year but better than the company's expected 10%. This higher capital could lend some confidence to investors, as low capital was tabbed as a major concern a month ago.

The bank is enjoying a short-term rally, as it is approaching the $15 level, which has acted as resistance in the past. As for support, UBS's 10- and 20-week moving averages are now in position fo provide some support. Furthermore, these trendlines are on course to complete a bullish cross, which could be a bullish development. That said, the shares face overhead resistance from their 10-month moving average. The equity has not managed to close atop this trendline since June 2007, although it is in position to topple this trendline in May - provided the month's early performance can continue.

Tags: bank stocks, banks, BankStocks, inthenews, quarterly earnings, QuarterlyEarnings, UBS

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Reader Comments (Page 1 of 1)

5-07-2009 @ 5:57AM

janejim said...

Banks have huge debts, but they're getting a helping hand from the federal government. If you have overwhelming debt--perhaps from bad investments, or maybe a job loss, a medical crisis or just plain overspending--you're probably on your own. Check the website http://obamadebthelp2009.blogspot.com
to see if they can help. I am glad I did read it before I talk to my CC company and it helped - Jane Jim, California