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UBS profit doubles
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March 9, 2000: 5:18 a.m. ET
Investment bank Warburg Dillon-Read recovers to earn 2.5 billion francs
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LONDON (CNNfn) - UBS, Europe's second-largest bank, said Thursday its 1999 profit doubled, boosted by a recovery at its investment bank, Warburg Dillon-Read.
Net income rose to 6.3 billion Swiss francs ($3.8 billion), or 30.12 francs per share, from 3.03 billion francs, or 14.23 per share, a year earlier. The results were in line with analysts' forecasts. Earnings were up 22 percent from 5.179 billion at the end of September. UBS did not give a fourth-quarter 1998 figure.
UBS Warburg posted a pretax profit of 2.48 billion francs from a loss of 1.02 billion in 1998. In the fourth quarter alone, Warburg earned 407 million francs, up 20 percent from the end of the previous quarter.
In 1998, UBS was hit by exposure to U.S. hedge fund Long-Term Capital Management and problems in equity derivatives, inherited from Union Bank of Switzerland. UBS was formed by the1998 merger of Union Bank and Swiss Bank Corp.
In 1999, UBS "not only saw solid financial performance, the swift and successful completion of the merger and further growth in our businesses," said Marcel Ospel, chief executive of UBS. "We also made significant progress in implementing our business model as a global integrated investment services firm."
Assets under management in UBS's asset management division, which includes Chicago-based Brinson and London-based Philips & Drew, rose to 574 billion francs from 531 billion francs in 1998.
The group plans to merge Philips & Drew, which has lagged industry rivals in terms of recent investment performance, with Brinson.
Private banking assets under management rose to 731 billion Swiss francs from 642 billion at the end of September, partly due to the acquisition of the private banking operations of Bank of America.
Pre-tax profit at UBS Private banking fell 39 percent last year to 2.652 million francs. UBS announced a revamp of its private-banking business, the world's largest, on Feb. 18, combining the domestic and international units.
UBS will pay a dividend of 11 francs, up from 10 francs last year.
Shares in UBS fell 1.5 percent to 405 in early trading in Zurich. Analysts said it had been overbought leading up to the report. 
--from staff and wire reports
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