UBS, like its beleaguered European rivals, reported that Q1 profits fell 54% from a year ago.  The bank's operations were pulled down, in part, by investment banking's weak performance and by a large accounting charge taken on the change in value of its own debt. The trouble doesn't stop there, unfortunately.  The bank anticipates that shareholders will rebel over executive pay at Thursday's annual shareholder meeting in Zurich.  Investors have raised concerns about the levels of compensation following a year in which the bank took a big hit in a rogue trading scandal and the share price plunged.

[C-I Note: Enormous pressures at UBS and its staff - both unique and common among its rival firms, at home and away - erode the firm's ability to generate profits and the staff's willpower to plow on, knowing that they may be placed on the unemployment line the following week.  Weak economies taking their toll on trading profits and commission revenue, dissension in critical production areas, like investment banking where top bankers jump to rivals to escape a group head many disrespect, ongoing job cuts and other cost reductions.

All this has given C-I pause to worry about whether UBS might be a "ticking time bomb."  With production down, and their jobs on the line, brokers or traders might feel incentivized to cut corners – violating not only firm policies by securities rules.  All this indicates that this might be a fortuitous time for Compliance to elevate its awareness for cues and red flags of "mischief" like of small or innocuous cheatings that from one moment to the next can get out of hand.

To read C-I's discussion on this concern, go to: Wednesday's BTN story, "UBS Earnings Down, Compliance Take Notice".]

For further details on Q1 results, go to:   [Dealbook, 5/2/12].