ZURICH, SWITZERLAND – UBS, Switzerland’s largest bank, posted a full-year net profit of CHF4.23 billion, compared to CHF7.5b in 2010. The bank’s revenues were up in some areas and new money under management grew strongly, up CHF42.4 billion for the year, showing a turnaround in consumer confidence.
But profits were hurt by fourth quarter losses in investment banking due to stagnant market conditions, with a significant slowdown in trading stocks and bonds. The bank warned investors that the first quarter of 2012 could prove difficult:
“As in the fourth quarter of 2011, ongoing concerns surrounding eurozone sovereign debt, the European banking system and US federal budget deficit issues, as well as continued uncertainty about the global economic outlook in general, appear likely to have a negative influence on client activity levels in the first quarter of 2012. Such circumstances would make sustained and material improvements in prevailing market conditions unlikely and would have the potential to generate headwinds for revenue growth, net interest margins and net new money. In light of the above, traditional improvements in first quarter activity levels and trading volumes may fail to materialize fully, which would weigh on overall results for the coming quarter, most notably in the Investment Bank.”
Analysts, according to financial media, were looking for Q4 net profits of CHF658 million but UBS reported CHF393m, down from third quarter profits despite the write-off in Q3 of 1.8 billion lost by a rogue trader.
Analysts were also looking at the bank’s capital-building and to see how well UBS is offsetting reduced revenue streams with continued cost-cutting. They were not disappointed here: UBS is currently one of the world’s best capitalized banks, noting in its statement to media Tuesday that it had reduced “Basel III risk-weighted assets by an estimated CHF20 billion and [was] building capital ratios”.
In 2011 it cut the bonus pool by 40 percent as part of cost reductions of CHF2.1 billion. Total costs last year were CHF22.4b. The company trimmed jobs but overall staffing remained at nearly 65,000 employees worldwide.
The year-end results were published with fourth quarter results before markets opened Tuesday 7 February.
Roger de Weck, new SSR CEO in January 2011
Bern, Switzerland (GenevaLunch) – Swiss Public Broadcasting Corporation, SSR, will be tightening its belt in January by streamlining its administrative structure. The company will be acting on the advice of Roger de Weck, who takes over in January as chief executive officer, to reduce the senior management team from nine members with four “paticipants” to seven members, with the four participants used as consultants on an occasional basis.
SSR owns TSR television, RSR radio, WRS radio and the swissinfo web site in the Lake Geneva region as well as several other media, in several languages, throughout Switzerland.
Analysts had predicted losses of up to £150 million for BA (British Airways) for the final three months of 2009, but the company weighed in with a loss of £50m, down significantly from the £122 it lost during that period in 2008. Its financial year ends in March, so the figures are for the company’s third quarter. Willie Walsh, chief executive, told journalists Friday morning 5 February that cost-cutting was responsible for the improvement, with costs reduced by more than 10 percent. The figures look less rosy for the financial year as a whole, compared to the first three quarters of 2008-09, with a loss more than four times as great. But Q3 did show an operating profit, and Walsh insists that the company’s structural changes are having a positive impact on its finances. Difficult negotiations continue with staff over pay cuts and the BA pension plan, with staff voting until 22 February on whether to strike.
Links to other sites: BA, BBC, Financial Times
British Air staff have voted in favour of a 12-day strike starting 22 December. Britain’s largest airline is widely expected to create chaos if the strike over the end of year holidays goes ahead. The 22,000 employees polled voted 92.5 percent in favour of the strike, to protest cost-cutting measures. The airline had a record loss in the six months that ended 30 September 2009. BA has posted information for travelers on its web site.
Bern, Switzerland (GenevaLunch) – SSR, the Swiss Broadcasting Company, is freezing salaries effective the end of 2009, as well as new hires, part of a series of measures to economize in the face of a growing deficit. The company announced Tuesday 23 June that the state-supported system will see its deficit grow from CHF200-790 million by 2014 without larger subsidies or revenues.
The salary freeze will allow the company to save CHF30 million a year, but it still needs to find another CHF40m a year to remain financially healthy.
Cisco Rolle: showing guests the quality of large-screen networking
San Jose, California, USA (Bloomberg) – Cisco is selling $4 billion of debt, only the second sale of its bonds in 25 years, as part of measures to cut costs in the face of falling sales worldwide of networking equipment.
