UBS posts seventh quarterly loss

Geneva - Hard-hit Swiss bank UBS AG reported another quarterly loss Tuesday while France's BNP Paribas posted a 6.6% increase in net profit.

The divergence continued this earning season's trend that has seen a number of big banks produce stronger results while others are still struggling from the fallout of the financial crisis.

A number of big banks have announced bigger profits for the quarter, including Deutsche Bank AG, Credit Suisse Group, Wells Fargo & Co., Bank of America, Goldman Sachs Group Inc. and JPMorgan Chase & Co. But Morgan Stanley joined UBS in reporting a loss, and others like Citigroup Inc. and HSBC Holdings PLC, were in the black but still weighed down by problem loans.

UBS, beset by a US tax evasion probe, posted a second-quarter loss of 1.4 billion Swiss francs ($1.3bn) in an improvement over the first three months of the year.

BNP Paribas' net profit was €1.6bn ($2.3bn) in the three months ended June 30, up from €1.5bn a year earlier. Chief Executive Baudoin Prot said the bank "is well positioned to take on the challenges of the current economic environment."

The Italian bank UniCredit SpA said its net profit for the quarter fell 74% to €490m ($705m), because of lower fees and commissions.

In Britain, Standard Chartered PLC said is first-half profit rose 5.5% to $1.88bn even as provisions for bad loans more than doubled to more than a billion dollars. But nationalized bank Northern Rock saw its first half loss rise 31% to £740m as bad loan provisions swelled to over a billion pounds.

Lloyds and France's Societe Generale are to report Wednesday, and Royal Bank of Scotland will announce its results Friday.

UBS, which has been struggling to recover from major losses in the U.S. mortgage crisis, said the result was more than three times the 395-million franc loss for the same period in 2008, when UBS was also saddled with writedowns of $5.1bn.

The bank, however, could see daylight after being caught in the middle of a US-Swiss legal battle over the Internal Revenue Service's search for US tax evaders. The two governments said Friday they reached a settlement in the case in which thousands of wealthy Americans are suspected of hiding billions of dollars with the Swiss banking giant.

Swiss media have reported that under the deal, whose details are still being worked out, the bank will escape paying a fine, but will have to hand over the names of 5 000 investors where there is strong evidence of tax evasion.

- AP