If the third-quarter results from Switzerland-based UBS
The results from UBS fell toward the lower end of the spectrum. They didn't have the jaw-dropping effect of the $8 billion-plus in losses at Merrill, but the $3.6 billion in losses it reported in its fixed income currencies and commodities (FICC) trading business was nonetheless a pretty poor showing.
Overall, UBS finished the quarter with a loss of $624 million -- within the $515 million to $687 million range the company had provided. The loss in the FICC segment was the main factor, but losses at some equity trading desks also hurt, because equity trading income was less than half what it was in the second quarter.
Like many of its competitors, though, UBS did show strength in other areas. Pre-tax earnings from its global wealth management and business banking segment were up 30% year over year, and slightly better than the prior quarter. Global asset management was likewise up 30% from the third quarter of 2006, though down slightly from the second quarter if you back out the second-quarter costs from closing down its Dillon Read hedge fund. Even though FICC losses overpowered everything else in the investment banking segment, other areas in that segment, such as mergers and acquisitions advisory services, were notably strong.
In its press release, UBS claimed that the fourth quarter had started off on a good note, but also noted that the mortgage problems from the third quarter haven't gone away and could bring more writedowns. Though the credit markets have loosened up since August, we still seem to be far from business as usual, so many investors may find it a bit hard to find comfort in that outlook.
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