UBS in talks over new building as bank bonus pool grows
The 6,000 London bankers at UBS were today celebrating a bonus jackpot as they learned of plans for new offices in the City.
The Swiss bank, which was the biggest European loser in the credit crunch, today announced pre-tax profits of SwFr2.8 billion (£1.69 billion) in the first quarter, well above the SwFr2.5 billion (£1.5 billion) it forecast at the end of last month.
UBS does not disclose how much it pays it investment bankers on a quarterly basis but it said expenses had risen because it had set aside more money for its bonus pool.
Investment banking, much of which is based in London, saw profits surge from SwFr297 million (£197 million) to SwFr1.19 billion (£718 million) largely on the back of stronger bond, currency and commodity trading. There was also a sharp improvement in share trading.
British Land and Blackstone, joint owners of the BroadgateEstate in the heart of the City, confirmed they were in exclusive talks with UBS about constructing a building for the bank at 4-6 Broadgate.
The £300 million development, which will not be a skyscraper and will be in keeping with the rest of the estate, should be completed by 2014.
UBS is the biggest tenant at Broadgate, occupying six buildings, but break clauses which allow it to leave in 2014 sparked fears it may desert the City for Canary Wharf. Its departure would have been a major blow to the City and British Land which gets around £45 million of rent from the bank a year.
Chief executive Oswald Grubel said he expected "gradual improvements in wealth management and asset management results" where the bank has suffered huge outflows of funds following American attempts to stop its citizens avoiding tax through offshore bank accounts.
In the first quarter the net outflow of funds was SwFr18 billion (£10.87 billion) down from SwFr56.2 billion (£33.9 billion) in the final three months of last year.
Grubel said he expected securities trading in the second quarter to continue in line with the first although he warned there was likely to be some market worries over European sovereign debt.
