Contrary indicator

3 May 2005 By Chris Hughes

The Swiss bank is content with its Q1 performance, saying the drop partly reflects a deliberate move to stay out of certain markets. But the underperformance relative to peers is disappointing for a bank that once reliably outperformed.

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UBS posted a 19% fall in pretax profits from its investment banking operations in the first quarter, relative to the same period in the 2004.

Revenues from its fixed income, rates and currencies unit were down 19%, while equities were down 4%. Investment banking advisory revenues were up 1%.

The Swiss bank could not trim costs as fast as revenues fell, resulting in a compensation ratio up of 55%, against 52% in the first quarter of last year. The costtoincome ratio rose from 66% to 70%.

At the group level, earnings rose 15% yearonyear, to SFr2.6bn (E1.7bn).

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