GENEVA (AP) -- Switzerland's biggest bank UBS AG on Wednesday reported a 55 percent drop in first-quarter net profit for 2012 due to writedowns and difficult market conditions.
First-quarter net profit was 827 million francs ($910 million), down from 1.81 billion francs in the same period last year, the bank reported before trading opened in Zurich. The results were lower than analysts' average estimate for a net profit of 1.2 billion Swiss francs ($1.32 billion).
Chief Executive Sergio P. Ermotti said the bank did well despite the "challenging market conditions." The results were a turnaround from the last quarter of 2011 when the bank, Switzerland's biggest by market capitalization, posted a net profit of 319 million francs.
Ermotti said the bank improved operations, built up its capital cushion as it is required to do and cut both risks and costs. He also said there were "strong net new money inflows" into UBS' wealth management business, evidence that clients still trust the bank, which is an engine of the Swiss economy..
It was just the second quarter for the bank under the leadership of Ermotti, who took over in September following a case of alleged rogue trading that cost UBS $2 billion. Ermotti pledged to tighten oversight at UBS and restructure the ailing investment banking unit where the trading scandal occurred.
Last month, the specter of a damaging tax evasion case rose again. After resolving a long-running tax probe in the United States with a $780 million fine and the handover of thousands of client files, UBS now faces allegations by former staff in France that it also helped French clients cheat on their taxes.
The bank strenuously denies the allegations and says it will defend itself using "appropriate legal means."
Rival Credit Suisse reported a 95 percent drop in first-quarter net profit last week due to writedowns, staff severance costs, bonus payments and the strong Swiss franc.