UBS profits drop 43pct on Facebook IPO

Switzerland’s biggest bank, UBS AG, said on Tuesday its second quarter pre-tax profit had fallen 43 percent to CHF951 million compared to a year earlier, citing lower trading revenues and losses related to the Facebook initial public offering.

“Revenues declined significantly in the securities business amid challenging market conditions,” the bank said in a press release.

“Due to the gross mishandling of Facebook’s market debut by NASDAQ we recorded a loss of CHF349 million in our US Equities business,” it added.

Net profit attributable to shareholders was also lower, dropping 58 percent to CHF425 million year-on-year.

UBS shares fell by nearly 5.5 percent when the market opened, trading at CHF10.45 per share.

The bank added that outlook for the year remained negative.

“Sovereign debt and European banking system issues, as well as the extent of uncertainty surrounding geopolitical tensions, the global economic outlook and the US fiscal “cliff”, will continue to exert a strong influence on client confidence and, thus, activity levels in the third quarter,” it said.