Earnings for Principal should have read: "Principal suffered realized and unrealized losses of $41 million tied to New York-based Lehman Brothers Holdings Inc., which filed for bankruptcy in mid-September and $41.2 million linked to Seattle-based Washington Mutual, which was recently acquired by New York-based JPMorgan Chase & Co. In the original version, the amounts were in billions.
UBS AG reported today a third-quarter net profit of 296 million Swiss francs ($252 million) after losing 858 million francs in the year-ago period.
The improved performance was due in large part to UBS’ move to reduce exposure to troubled U.S. real estate assets by nearly 50% during the third quarter.
However, the Zurich, Switzerland-based bank was still affected by the credit crunch, with 5.1 billion francs ($4.4 billion) of write-downs incurred during the quarter, largely in U.S. mortgage-backed assets.
UBS’s wealth management business also suffered quarterly net outflows of 49.3 billion francs ($42.4 billion).
UBS officials project that fourth-quarter results will be negatively affected by a possible reversal of its own credit gains.
UBS also expects to incur losses from the sale of up to $60 billion of illiquid securities and other assets from its balance sheet to the Swiss National Bank. The sale was announced Oct. 16 (
InvestmentNews, Oct. 16).
Principal Financial Group Inc. reported yesterday that third-quarter profit fell 61% after declaring substantial investment losses.
The Des Moines-based financial services company’s net income was $90.1 million, or 35 cents a share, down from $232.3 million, or 87 cents a share, a year earlier.
Principal suffered realized and unrealized losses of $41 million tied to New York-based Lehman Brothers Holdings Inc., which filed for bankruptcy in mid-September (
InvestmentNews, Sept. 15) and $41.2 million linked to Seattle-based Washington Mutual, which was recently acquired by New York-based JPMorgan Chase & Co. (
InvestmentNews, Sept. 25).
Assets under management at the end of the third quarter fell 6% from a year earlier to $287.4 million.
