UBS experienced mixed results in its wealth management divisions in Switzerland, North America and the rest of the world in the third quarter of 2009, while the group as a whole suffered a net loss, although underlying profitability improved.

At its Wealth Management & Swiss Bank unit, UBS said “results were disappointing” as it recorded a pre-tax profit of SFr792 million ($773.9 million), compared with SFr932 million in the three months to the end of June.

Although some of the worst losses and client outflows have passed, the bank is still battling to restore its fortunes, having suffered some of the largest write-downs from the credit crunch, as well as see its business hit by a damaging tax evasion case in the US.

UBS said the decline in the Wealth Management & Swiss Bank division’s performance occurred despite a decrease in restructuring charges as several items affected third quarter results. Wealth Management Americas, meanwhile, returned to profitability as it recorded a pre-tax profit of SFr110 million compared with a pre-tax loss of SFr221 million in the previous quarter, mainly due to lower operating expenses.

Global Asset Management experienced stronger performance and pre-tax profit rose to SFr130 million from SFr82 million. The increase was primarily due to higher performance fees, mainly in alternative and quantitative investments, and higher management fees, UBS said in a statement.

For the group as a whole, UBS logged a net loss of SFr564 million. After adjusting the pre-tax loss for the three substantial accounting charges totalling SFr2.15 billion, the Zurich-listed group made an underlying pre-tax profit of SFr1.557 billion.

The firm’s Basel Tier 1 capital ratio increased to 15 per cent, up from 13.2 per cent at the end of June.

The wealth management business continued to suffer outflows of client cash. Net new money outflows were SFr16.7 billion for Wealth Management & Swiss Bank, SFr9.9 billion for Wealth Management Americas, and SFr10.0 billion for Global Asset Management.

Invested assets were SFr2.258 trillion at quarter-end, up from SFr2.250 trillion on 30 June 2009.

UBS said its cost reduction programme was “on track”. Personnel numbers have been cut by 2,783 to 69,023 at 30 September 2009. The 2010 headcount target has been adjusted to 65,000 to reflect divestments.

“Having stabilized the bank’s financial condition and resized the business, UBS expects to see further progress in restoring the underlying profitability of the business in future quarters, particularly in 2010,” UBS said in a statement.

“UBS anticipates the early part of 2010 to reflect the full impact of 2009's cost reductions. The bank does not expect an immediate recovery in client net new money flows, and the impact of low interest rates on net interest income continues to hold back revenues, especially in Wealth Management & Swiss Bank,” it said.