UBS reports 1Q net loss $11 billion

In a conference call with analysts, Rohner confirmed reports that UBS is selling parts of its subprime portfolio to U.S. asset manager BlackRock Inc. for $15 billion (9.7 billion euros). UBS will be involved in setting up the fund, which will be composed of subprime and higher value Alt-A positions, he said.

The bank also addressed the continued ebb in confidence from banking clients, particularly in its home market Switzerland.

UBS said it suffered a net outflow of 12.8 billion francs ($12.17 billion) in the quarter, compared with a net inflow of 52.8 billion in the same period last year. Swiss customers withdrew 1.9 billion francs ($1.8 billion), while the bank's global asset management division saw outflows of 16.5 billion francs ($15.66 billion).

The figures, which are a closely watched gauge of future revenue because they reflect general market conditions as well as customer confidence in the bank, were partly offset by inflows of 5.6 billion francs ($5.31 billion) in other units.

"The outflows we have experienced in Switzerland, and reduced levels of inflows experienced elsewhere, are, no doubt, also a reflection of the reputational damage that we have sustained over recent months," chief financial officer Marco Suter said. "The capital increase will certainly help in this regard, but we remain cautious as to the near-term net new money outlook."

UBS sent a letter to Swiss customers on Tuesday, acknowledging their "concern and disappointment" and reassuring them that "the bank remains strong" thanks to its solid capital base.

Rohner said recent data indicated that market conditions were improving, but that the financial environment would likely remain difficult for the rest of the year.

"This will weigh on revenues in the coming quarters," he said, without elaborating.

He said UBS "will not rest until we have fully restored trust of our clients, of our shareholders and of our employees."

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