UBS is winding up its Dillon Read Capital Management hedge fund arm, run by former investment banking chief executive John Costas, after the division racked up a Sfr150m (€90.8m) first-quarter trading loss and forced the Swiss bank to take "decisive action".

The news dominated the Swiss bank's first-quarter results today, as it revealed group net profits fell 7% to Sfr3.3bn. Pre-tax profits at the investment bank nudged up 3% to a record Sfr1.8bn, while asset management profits were up 8% to Sfr404m.