Swiss UBS Group has announced a third quarter profit of CHF296m ( €198m), thanks in part to a strong performance from its structured products businesses, it said. The bank’s largest losses and writedowns were recorded in positions related to the US residential real estate market, while further credit valuation adjustments were made on protection bought from monoline insurers.
Structured notes posted solid revenues, it said, though these were down on the record second quarter.
Derivatives revenues increased due to strong performance across all geographical regions, particularly Asia Pacific and the US. Revenues in equity-linked products were negative, as all regions saw a decline from the previous quarter. Exchange-traded derivatives revenues increased across all asset classes.
Since the onset of the financial crisis, UBS has undertaken a number of measures to safeguard its liquidity position, including the diversification of its funding sources, its contingency planning processes and its global scope in order to maintain a balanced asset/liability profile, it said.
The bank reported a similar funding profile to its quarter-end and year-end 2007 profile, in terms of diversification with respect to currency and product type. According to the Swiss banking group, 18% of its funding continued to be raised on a secured basis, as well as on a diversified unsecured funding. It raised new long-term funds in third quarter 2008 through the issuance of approximately CHF19.7bn of long-term debt and structured notes.