Updated from 1:26 a.m. EDT
reported a first-quarter loss of 1.98 billion Swiss francs ($1.75 billion) primarily on losses suffered at its investment bank.
A year earlier, UBS reported a loss of 11.62 billion Swiss francs.
The latest quarter included a goodwill impairment charge of 600 million Swiss francs related to the sale of UBS Pactual.
In a statement Tuesday, UBS said the investment bank recorded a pretax loss of 3.16 billion francs, compared with a pretax loss 8.1 billion francs in the fourth quarter. The bank said "losses on risk positions from businesses the investment bank has now exited or is in the process of exiting were lower than in the prior quarter."
The bank's wealth management and Swiss bank unit saw a pretax profit of 1.08 billion francs. The wealth management Americas unit recorded a loss of 35 million francs.
UBS said outflows of net new money at its wealth management and Swiss bank unit slowed in the first quarter to 23.4 billion francs. Global asset management saw withdrawals of 7.7 billion francs, while wealth management Americas saw net inflows of 16.2 billion francs.
"There has been an improvement in market sentiment during the first quarter, with a strong rebound in global stock market indices since early March, but the credit markets improved only partly and trading in complex financial products remains illiquid," UBS said. "The markets continue to be unsettled, and we remain cautious on the immediate outlook for UBS."
The quarterly loss was in line with estimates the bank provided in mid-April when it also said it planned to reduce headcount in 2010 to 67,500 from 76,200 at the end of March.
UBS, which replaced its CEO, chairman and several other senior officials after record losses of about 21 billion francs last year, has been hit hard by the financial crisis and a U.S. legal probe into its offshore dealings with American clients.
Global asset management recorded a pretax loss of 59 million francs, blamed on the charges related to the sale of Brazilian unit UBS Pactual.
"The strong influence that government policy has on the market environment was clearly demonstrated in the first quarter as investors became less risk averse," the bank said.
"However, the real economy has continued to deteriorate, and this is expected to have negative implications for credit-related provisioning in coming quarters."
Overall, UBS said its total assets fell by 153.49 billion francs to 1.86 trillion francs.
UBS's tier 1 ratio -- which indicates a bank's core equity compared with its risk-weighted assets -- fell to 10.5% from 11% in the fourth quarter of last year. The bank blamed the drop partly on a re-evaluation of its 2008 figures, which saw it increase its net loss attributable to shareholders by a further 405 million francs.
UBS was recently overtaken as Switzerland's largest bank by market capitalization by its archrival
, which last month reported a first-quarter profit of 2 billion francs.
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