UBS anticipates third-quarter profits
Even with a potential loss of more than $2 billion, Swiss-bank UBS expects to report a profit in third quarter 2011. Profits will absorb the $2.3 billion loss resulting from unauthorized trading and approximately half a billion dollars of restructuring charges associated with cost reduction programs, according to the bank. Kweku Adoboli, a London-based trader working on UBS's exchange-traded-fund desk in London, is believed to have made unauthorized transactions resulting in losses. British police since charged him with false accounting and fraud. UBS is expecting the profit to come from operations in both its asset and wealth management departments. UBS said that no client positions would be affected by the rogue trades. However, the Basel II Tier 1 capital ratio is expected to decline slightly due to the impact on risk-weighted assets of the unauthorized trading. The cost reductions will also continue and more people will lose their jobs at UBS going into 2012. But, the company isn't contracting all the way around, the company email said. "UBS will continue to invest in growth regions, including Asia Pacific, the Americas and the emerging markets, as well as in our global wealth management franchise," the statement reads. UBS does not expect any information to change going into its actual quarterly report on Oct. 25. Write to Jacob Gaffney.