Rogue trader victim UBS topost modest profits
SWISS bank UBS said will today post a slight profit for the third quarter, despite rogue trading which lost the bank $2.3bn.
In a statement the bank said: "UBS expects to report a modest net profit for the group and positive net new money in its wealth management businesses for the third quarter of 2011."
When the bank first announced the discovery of the massive fraud carried out by Kweku Adoboli, it warned that it might be forced to report a loss for the three months ending September due to the unauthorised trade.
However, the bank said it now expected a small profit, even after taking into account losses from the incident as well as 400m Swiss Franc (€329m) worth of restructuring charges linked to its cost-cutting programme.
Credit gains of 1.5bn Swiss Francs from its financial liabilities as well as the sale of treasury related investments had net it 700 million francs, largely cancelling out the losses.
Adoboli, the son of a Ghanaian former United Nations official, worked for UBS's global synthetic equities division in the City of London financial district.
He bought and sold exchange traded funds, which track different types of stocks or commodities such as precious metals.
UBS has accused Adoboli of carrying out "fictitious" trades.
He was arrested at the bank's London offices in the early hours of September 15.
Within hours, the bank announced it had lost $2 billion through unauthorised trading, but it later raised the estimated losses to $2.3 billion.