UBS Capital has ceased investment activity in Europe and will concentrate on managing the existing assets in its portfolio to maximise value for shareholders. Third quarter results for the portfolio were negatively impacted by valuation losses recording a pre-tax loss of CHF418 million, CHF304 million more than for the same period last year. The loss is due to higher write downs in the portfolio.
Writedowns totalled CHF387 million and were made across the portfolio in all regions. UBS Capital will continue to maximise returns on its existing portfolio, capitalising on exit opportunities where they exist.
A spokesperson for the group stressed there was no intention to sell the private equity business and the group continues to manage assets in Asia and the US, where it has also invested in third party funds.
The Swiss bank has also announced it is adopting a single UBS brand. From the second half of 2003, the firm will no longer market its services using the UBS Warburg or UBS Paine Webber brands. Both costs and headcount at UBS are at the lowest point since its merger with PaineWebber in 2000. The decision to introduce a single brand will lead to a non-cash net write down of around CHF1 billion relating to the PaineWebber brand, which is currently capitalised on the UBS balance sheet.
In a statement to shareholders, Peter Wuffli, president of the group executive board, said: “In the current environment, we need a prudent balance between our acknowledged defensive characteristics and our entrepreneurial attitude towards the mid- and long-term growth prospects of our global franchise.”
But for now the prospects of a sustained global economic recovery remain distant and investor confidence in equity markets remains low. UBS’ view is that its 2002 results are unlikely to reach those of 2001.