UBS Posts Third Straight Quarterly Loss

Updated from 1:39 a.m. EDT

ZURICH ( TheStreet) -- Losses continued at Swiss banking giant UBS ( UBS) as it posted a wider second-quarter loss of 1.4 billion Swiss francs ($1.32 billion) from a year-earlier loss of 395 million francs, and said a "sustainable recovery is not yet visible."

It's the third straight quarterly loss for UBS, Switzerland's biggest bank by assets.

The latest second quarter include an own credit charge of 1.2 billion francs and goodwill charges related to the sale of UBS Pactual. Excluding these items, pretax operational profit was 971 million francs, UBS said in a statement Tuesday.

"Market conditions improved steadily during the second quarter, with asset prices rising as investor confidence began to return in many credit and equity markets," UBS said in a statement Tuesday. "In spite of these positive economic signs, the overall economic environment in most of the regions in which we operate remains recessionary. Sustainable recovery is not yet visible."

UBS has been struggling to recover from major losses in the U.S. mortgage crisis. It also has been in the middle of a U.S.-Swiss legal battle over the Internal Revenue Service's search for U.S. 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 bank.

The bank, once the largest wealth manager in the world, said the outflows of money rose sharply in the quarter as investors pulled out assets. The net outflow in the quarter was 39.4 billion francs, compared with 14.9 billion francs in the first quarter.

UBS said its second-quarter results were an improvement over the first quarter, when it reported a loss of 1.98 billion francs. The second quarter benefited from lower losses on risk positions from businesses now exited or in the process of being exited, UBS said.

-- Reported by Joseph Woelfel in New York.

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