Pre-tax profits at the Americas wealth management business of UBS slipped only slightly in the third quarter, but net new money flows improved.

UBS said pre-tax profits at its Americas wealth management business
slipped a touch in the third quarter of this year but overall its results in
the region held steady, while pre-tax profits for the Zurich-listed bank as a
whole were hit by unauthorized trading, as expected.

Wealth Management Americas’ pre-tax profit fell 1 per cent
to SFr139 million from SFr140 million, UBS said in a statement today. The
pre-tax profit at the wealth management arm of UBS rose to SFr888 million
(around $1.0 billion) in the third quarter of 2011, compared with SFr672 million
in the previous three months.

Within the Americas
business, operating income increased 1 per cent to SFr1.294 billion from
SFr1.284 billion as a result of higher net interest and trading income as well
as an increase in realised gains on the sale of securities held as
available-for-sale. These effects were partly offset by lower transaction-based
revenues resulting from lower client activity. Third quarter net new money was
SFr4.0 billion compared with SFr2.6 billion in the second quarter.

Financial advisors employed with UBS for more than one year
and net recruiting of financial advisors contributed to the improvement in net
new money in the Americas.
The gross margin on invested assets in Swiss franc terms increased by 4 basis
points to 80 basis points, as income increased 1 per cent compared with a 4 per
cent decline in average invested assets.

Since the $2.3 billion trading loss at the investment bank
was revealed over a month ago, UBS has seen the departure of its chief
executive, Oswald Grübel, who was replaced on an interim basis by Sergio
Ermotti.

In a separate statement today, UBS reconfirmed the
reliability of financial statements included in its 2010 annual report, stating
that the financial impact of the unauthorized trading activity that rocked the
bank has been “fully reflected” in the third-quarter financial report figures.

Net profit attributable to UBS shareholders across all
business lines stood at SFr1.018 billion, compared with SFr1.015 billion in the
second quarter of 2011. Pre-tax profit declined by SFr674 million to SFr980
million. “This was mainly due to the trading income loss of SFr1.849 billion
related to the unauthorised trading incident, lower revenues in the investment
bank, and total restructuring charges of SFr387 million,” UBS said. However,
“this was partly offset by an own credit gain of SFr1.765 billion and a gain of
SFr722 million from the sale of treasury-related investments”, it added.

For the entire Swiss banking group, it reported a BIS Tier 1
ratio of 18.4 per cent.

At the investment bank, which was at the centre of the
“rogue trader” drama, this business logged a pre-tax loss of SFr650 million
compared with a loss of SFr406 million in the third quarter of 2010. The
pre-tax loss, excluding own credit gains of SFr1.765 billion and a trading
income loss relating to the unauthorised trading incident of SFr1.849 billion,
was SFr566 million compared with a loss, excluding the own credit gain, of
SFr19 million in the third quarter of 2010.