Global wealth manager UBS AG (UBS)
announced Thursday it expects to return slight Q3 profits after cutting its exposure to U.S. residential mortgages. "Despite extremely volatile market conditions, UBS currently expects to report a small profit for the third quarter, based on preliminary estimates," the company said in a brief press statement.
The bank was "hit hard by the credit crisis after building massive positions in risky mortgage debt," MarketWatch reported
Thursday. The move away from troubled and unprofitable U.S. mortgage markets -- coupled with some 1,900 job cuts -- should, however, enable the Swiss banking giant to bounce back.
UBS stock rose 8.1 percent after the announcement, indicating at least some short-term investor confidence in the banking giant's ability to recover from a mortgage-turned-credit mess.
"We have adjusted our cost base and head count to respond to the current market challenges and we will continue to do so in the coming months to ensure a return to profitability at the earliest possible time," UBS chairman Peter Kurer told the media.
UBS will post its fall earnings Nov. 4.
For more information, visit http://www.ubs.com
Disclosure: The author held no relevant positions when this story was published. Indirect holdings may exist via mutual fund investments. HW reporters and writers follow a strict disclosure policy, the first in the mortgage trade.