UBS chairman predicts profitable future

ZURICH, Switzerland, Aug. 18 (UPI) -- Chairman Peter Kurer of Swiss UBS said he believed the bank, which lost $326.8 million in the second quarter, can return to earning a profit.

"It is like after a heavy storm. You have at first to remove all the dead wood, clean out the house and cellar and in a third phase bring the house back to spic and span," said Kurer, Swissinfo reported.

The bank has been hit with $42 billion in write downs resulting from the credit crisis and recently agreed to buy back $19.4 billion in auction-rate bonds that its clients could not sell.

In the second quarter, the bank also faced withdrawals of $40.1 million by clients.

"The outflow of client money is extremely regrettable and it hurts," he said.

Putting that in perspective, he said, the outflow amounted to "around 1 percent of the total assets of the wealth management business."

But, Kurer said the bank is undergoing "a radical transformation phase."

He said management salaries and results would be linked. "Managers and staff who do not add to earnings will have to feel that in their salaries," he said.

Within three years, the bank would begin earning "very much money," he said.