UBS profits slip as shares revival fades

THE RALLY on world equity markets which appeared to have been sustained over the last two years has ebbed away, according to financial and broking giant UBS.

The Swiss-based international bank today reported quarterly profits for the first three months of 2005, marginally below the record set in the same quarter of 2004.

It blamed a fall in share trading, the best indication of the health and confidence - or lack of it - in world markets, it says.

Reporting earnings from its financial operations of Swfr2.427bn (£1.07bn), just Swfr1m down on last time, UBS chief financial officer Clive Standish said: 'We benefited from our growing core of recurring revenues from our wealth and asset management business helping us balance the dip in our securities trading performance, which is always a reflection of prevailing market conditions.'

In a trading update, the bank said: 'It is hard to predict at this early stage how the year will turn out. History shows us that there is a natural seasonality boosting first-quarter performance, and market activity has ebbed as the year has progressed.'

After a bright start to the year in which the FTSE 100 broke through 5000 in February - a rally of more than 50% from the nadir of March 2003 - the market has stagnated.

UBS total earnings for the quarter including its industrial and private-equity holdings came in at Swfr2.625bn, a rise of 15%.