Swiss bank UBS AG yesterday offered evidence of its recovery with a stronger-than-expected second-quarter profit of 2 billion Swiss francs (US$1.9 billion), and said it should resolve all tax matters with the US government by October.
The Zurich bank’s results compared with a SF1.4 billion loss in the second quarter of last year and far exceeded analysts’ forecasts.
UBS was boosted by a strong performance from its investment bank, whose pretax profit rose 10 percent to SF1.3 billion at a time crosstown rival Credit Suisse and US banking giants experienced a slowdown in the sector. Earnings were boosted by a SF595 million credit gain on financial liabilities.
PHOTO: EPA
“This was a good result in volatile market conditions and demonstrates the progress we are making,” UBS chief executive Oswald Gruebel said yesterday. “I remain confident in our future and I firmly believe that we have the right strategy in place.”
UBS said it also expected an end to its US regulatory problems now that the Swiss parliament has approved closer cooperation with the US Internal Revenue Service. The bank has agreed to turn over 4,450 names of wealthy Americans suspected of dodging taxes through secret accounts.
UBS and Credit Suisse were given a clean bill of health last week by the Swiss financial regulator, which released findings from its “stress tests” to coincide with the results of a much larger examination by the EU.
Credit Suisse Group also beat market expectations last week as it announced a second-quarter net income of SF1.6 billion.
In Germany, Deutsche Bank AG, Germany’s biggest lender, yesterday reported an unexpected 9 percent rise in second-quarter earnings as gains at its transaction banking and asset management operations helped counter a weaker investment banking performance.
The Frankfurt-based bank said net profit rose to nearly 1.2 billion euros (US$1.55 billion) from 1.1 billion euros a year earlier — beating analysts’ forecast of 1.05 billion euros. Pretax profit rose 16 percent to 1.5 billion euros.
The bank said overall revenue declined in the second quarter — a volatile quarter that included the peak of the eurozone debt crisis — to 7.2 billion euros from 7.9 billion euros a year earlier.
However, loan loss provisions declined sharply to 243 million euros from 1 billion euros in last year’s second quarter.
“In a quarter which was characterized by increased investor uncertainty and higher market volatility, Deutsche Bank’s investment banking business followed the industry-wide trend of weaker profitability,” CEO Josef Ackermann said in a statement.
However, he pointed to “very solid” performances from other divisions and said the bank’s private and business client segment had its best quarterly result since the peak of the financial crisis — demonstrating “the strength of our diversified business portfolio.”
A Chinese freighter that allegedly snapped an undersea cable linking Taiwan proper to Penghu County is suspected of being owned by a Chinese state-run company and had docked at the ports of Kaohsiung and Keelung for three months using different names. On Tuesday last week, the Togo-flagged freighter Hong Tai 58 (宏泰58號) and its Chinese crew were detained after the Taipei-Penghu No. 3 submarine cable was severed. When the Coast Guard Administration (CGA) first attempted to detain the ship on grounds of possible sabotage, its crew said the ship’s name was Hong Tai 168, although the Automatic Identification System (AIS)
An Akizuki-class destroyer last month made the first-ever solo transit of a Japan Maritime Self-Defense Force ship through the Taiwan Strait, Japanese government officials with knowledge of the matter said yesterday. The JS Akizuki carried out a north-to-south transit through the Taiwan Strait on Feb. 5 as it sailed to the South China Sea to participate in a joint exercise with US, Australian and Philippine forces that day. The Japanese destroyer JS Sazanami in September last year made the Japan Maritime Self-Defense Force’s first-ever transit through the Taiwan Strait, but it was joined by vessels from New Zealand and Australia,
CHANGE OF MIND: The Chinese crew at first showed a willingness to cooperate, but later regretted that when the ship arrived at the port and refused to enter Togolese Republic-registered Chinese freighter Hong Tai (宏泰號) and its crew have been detained on suspicion of deliberately damaging a submarine cable connecting Taiwan proper and Penghu County, the Coast Guard Administration said in a statement yesterday. The case would be subject to a “national security-level investigation” by the Tainan District Prosecutors’ Office, it added. The administration said that it had been monitoring the ship since 7:10pm on Saturday when it appeared to be loitering in waters about 6 nautical miles (11km) northwest of Tainan’s Chiang Chun Fishing Port, adding that the ship’s location was about 0.5 nautical miles north of the No.
SECURITY: The purpose for giving Hong Kong and Macau residents more lenient paths to permanent residency no longer applies due to China’s policies, a source said The government is considering removing an optional path to citizenship for residents from Hong Kong and Macau, and lengthening the terms for permanent residence eligibility, a source said yesterday. In a bid to prevent the Chinese Communist Party (CCP) from infiltrating Taiwan through immigration from Hong Kong and Macau, the government could amend immigration laws for residents of the territories who currently receive preferential treatment, an official familiar with the matter speaking on condition of anonymity said. The move was part of “national security-related legislative reform,” they added. Under the amendments, arrivals from the Chinese territories would have to reside in Taiwan for
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