UBS earns a third of its profits overseas, and although it does not break down the figures geographically it is understood that London makes up a third of these profits.
Robert Studer, UBS chief executive, said the 1994 forecast for profits before provisions was well above its medium-term target, but a result similar to 1993 was not expected.
'Our 1994 budget is, as far as operating results are concerned, well above the target figures we had penned into our 1993/96 medium- term planning. We do not, however, expect a result along the lines of 1993,' Mr Studer said.
Alison Deuchars, an analyst with Lehman Brothers, said: 'You would expect a bank with that size of trading operation to have had a very good year. This year, trading will be very difficult in the short term. UBS's earnings growth will have to be driven by falling provisions (against bad debts).'
UBS stood out from many of its international competitors by increasing its interest income by 6.2 per cent, to SFr3.6bn. International banks suffered a narrowing of margins in the second half of 1993, reversing the trend towards wider margins over the past few years.
UBS said interest on arrears continued to increase. 'Difficult economic conditions are making themselves felt in this sector,' it said.
Trading income grew by 73.5 per cent to SFr2.9bn, a third of this from dealing in derivatives. Swiss Bank Corporation and Credit Suisse are more heavily dependent on derivatives trading, but UBS said it was expanding in this area.
The biggest contribution to profits was from services, including investment management, at SFr4bn. UBS's UK fund management operation is now second only in size to Mercury Asset Management.
The bank is increasing the dividend on bearer shares from SFr29 to SFr32, and on registered shares from SFr5.8 to SFr6.4.
Total assets grew by 16.7 per cent to SFr311.3bn, while capital and reserves amounted to SFr21.7bn.
The price of bearer shares stood SFr26 lower at SFr1,451 by mid-morning after falling to SFr1,415. Dealers said investors had speculated ahead of the results that UBS might introduce a singe share category and that the terms would have raised the market value of the bearer by 10 per cent.