UBS adds to gloom at end of bank season

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The Independent Online

The beleaguered Swiss banking giant UBS is expected on Tuesday to write off a further €3.5bn (£2.7bn) of assets hit by the credit crunch, drawing the curtain on the second-quarter reporting season for Europe's banks.

Revenues from the bank's equities division in the second quarter are expected to slump by 40 per cent on the same period last year, while corporate finance revenues will haemorrhage by more than 60 per cent.

UBS's figures will be unveiled days after it was forced to buy back nearly $20bn (£10bn) of so-called auction rate securities from angry clients, who alleged they were misled over the risks associated with the products. It was also forced to pay a $150m fine to American regulators.

Royal Bank of Scotland's chief executive, Sir Fred Goodwin, said last week that profits at the group in the first half of the year had fallen by £691m – much less than the £1.2bn fall many analysts had predicted.

Barclays' chief executive, John Varley, apologised on Thursday for a 33 per cent slump in the bank's first-half profits to £2.75bn, while profits at HSBC, Europe's biggest bank, slumped by 28 per cent to $10.2bn.

Profits at HBOS fell by 72 per cent in the first half to £931m. Lloyds TSB's chief executive, Eric Daniels, saw profits collapse by 70 per cent to £599m.

Alliance & Leicester, which is subject to a bid from Santander, posted a £2m profit – a 99 per cent fall on last year.

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