Swiss banking giant UBS, which had been hit hard by the subprime crisis, on Friday said it would break even or report a slight loss for its second quarter.

In a statement, the bank said its second quarter results "are likely to be at or slightly below break-even", marking a sharp contrast from its massive first quarter loss of 11.54-billion Swiss francs ($11.25-billion).

"The results reflect positive contributions from Global Wealth Management & Business Banking and from Global Asset Management, offset by a loss in the Investment Bank," said the bank.

The news beat analyst forecasts of a four-billion Swiss franc loss, which sent UBS shares stock diving to an all-time low point earlier this week.

But Friday's news lifted the shares significantly, with the stock opening up 7.52 percent at 22.54 Swiss francs, outperforming an overall market which was up just 0.87 percent.

UBS has written down over $37-billion in assets since the subprime crisis emerged last year.

It had to seek fresh capital twice, once from a Singapore sovereign wealth fund GIC and an unnamed Middle eastern investor, and the second time from its shareholders.

In an announcement ahead of its scheduled earnings report on 12 August, the bank said that further market deterioration led to writedowns and losses on positions held by its investment bank division.

However, its wealth management and asset management divisions had offset the impact.

In addition, a tax credit of approximately three-billion Swiss francs would help boost its accounts for the quarter ending 30 June.

The bank also revealed that money outflow was "most pronounced" in April, but that there was an improvement in May and June.

It added that it expected its Tier One capital ratio — a measure of capital adequacy — to reach approximately 11.5 percent at the end of the quarter, and that it did not need to raise new equity.

AFP