Profits down 10% for UnionBanCal

20 July 2007

UnionBanCal has posted a ten per cent fall in second-quarter earnings, with a drop in investment income outweighing higher levels of capital investment.

The bank's net income stood at $165.4 million, or $1.19 per share, having fallen from $1.82.9 million, or $1.26 per share, for the year ago period.

The performance was above analysts' expectations of a return of $1.10 per share.

Revenue also dropped by four per cent compared with the same period last year to $661 million.

Meanwhile, the bank also announced that it was facing fines over charges of money-laundering and breaches of banking security laws and has set aside some $10 million to settle the issue.

A statement form Masaaki Tanaka, UnionBanCal's chief executive, said: "These regulatory actions relate to compliance issues that occurred in the past.

"We have taken significant steps to improve our compliance program and continue to do so."

Mr Tanaka also confirmed that the Office of the Controller of the Currency has said it will impose a cease-and-desist order in relation to the bank's system of internal controls.

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