New York: UBS AG generated about $2.3 billion (Dh8.44 billion) of revenue in its fixed-income division in the first quarter as Switzerland's biggest bank rebuilt the unit following record losses, people with knowledge of the situation said.

UBS may have revenue of almost $1 billion from credit alone, said the people, who declined to be identified because the figures haven't been publicly released. UBS hired about 350 people at its fixed-income unit, which includes emerging markets and foreign exchange, in the past 12 months.

The performance would mark a reversal of fortune for the bank's debt unit, which was responsible for most of the more than $57 billion in writedowns and losses during the credit crisis.

Relative progress

UBS, in a statement yesterday, said the figure of about $2.3 billion is "slightly higher" than its current estimate for the period. Zurich-based UBS had a loss of 1.97 billion Swiss francs ($1.85 billion) from fixed-income sales and trading in the first quarter of 2009, the company reported.

"The relative progress for UBS' fixed-income has to be good because they barely made any revenue in 2009," said Dirk Hoffmann-Becking, an analyst at Sanford C. Bernstein in London. "Whether you get back to a top five position in fixed income, which is where the profit is, is another issue."

UBS rose as much as 5.2 per cent in Swiss trading, the most since August, and was 63 centimes, or 3.8 per cent, higher at 17.23 francs by 12:20pm Zurich time. The stock has advanced 7.4 per cent this year. In its statement, UBS said that "because the quarter has not ended and results to date are subject to possible fair value adjustments, including those relating to own credit", the estimate of about $2.3 billion "may not be reliable". UBS will publish first quarter results on May 4.

Commodities unit

Banks are profiting from trading and selling debt as credit markets recover to levels not seen since 2007.

Goldman Sachs Group fixed-income, currencies and commodities unit will probably report revenue of $6.8 billion for the first quarter, up from $4 billion in the fourth quarter and $6.6 billion in the first quarter of 2009, according to a note from Richard Staite, an analyst at Atlantic Equities. He rates New York-based Goldman Sachs "overweight".

UBS' hires so far this year include Thomas Siegmund, formerly of Nomura Holdings Inc., and Shahryar Mahbub, previously at New York-based Citigroup, to co-head fixed-income Asia, people close to the bank said. UBS also hired Edward Hubner and two other credit traders from Deutsche Bank AG in New York, according to the people.

RBS fined for violation

Partly-nationalised Royal Bank of Scotland was fined nearly £29 million (Dh159.45 million) yesterday for breaking competition law, a British financial watchdog said.

The Office of Fair Trading (OFT) said it had slapped the fine on RBS — which is 84 per cent publicly-owned after being bailed out during the global financial crisis — for revealing details of its loan prices to rival Barclays.

"Any company that discloses confidential future pricing information to its competitors risks a substantial penalty," said Ali Nikpay, the OFT's senior director of cartels and criminal enforcement.

RBS told Barclays the cost of its loans to firms such as solicitors and accountants in a series of contacts between October 2007 and February or March 2008, the OFT said.

The OFT said it had "found evidence that the information was taken into account by Barclays in determining its own pricing".

An RBS spokesman lamented the breach of competition rules.