U.S. Markets close in 4 hrs 41 mins

Swiss bank UBS reports Q1 results Wednesday

Frank Jordans, The Associated Press

GENEVA (AP) -- Swiss bank UBS AG reports first-quarter results before markets open in Zurich on Wednesday.

WHAT TO WATCH FOR: Rival Credit Suisse reported a 95 percent drop in first-quarter net profit last week on writedowns, staff severance costs, bonus payments and the strong Swiss franc. UBS faces some of the same charges and investors will be looking for signs that the bank is further cutting its costs.

The quarter is the second under new chief executive Sergio 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 reared its head again. Having resolved a long-running 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 has vigorously denied the allegations and said it will defend itself using "appropriate legal means."

WHY IT MATTERS: UBS is Switzerland's biggest bank by market capitalization and a key motor of the Swiss economy.

WHAT'S EXPECTED: Analysts' average estimate is for a net profit of 1.2 billion Swiss francs ($1.32 billion). Vontobel analyst Teresa Nielsen sees a net profit of 1.42 billion francs.

LAST YEAR'S QUARTER: UBS reported a first-quarter net profit of 1.81 billion francs (then $2.05 billion) last year.