Swiss banking giant UBS, which had been hit hard by the subprime crisis, said that it would break even or report a slight loss for its second quarter thanks to a substantial tax credit.

In a statement, the bank said that its second quarter results are likely to be at or slightly below break even marking a sharp contrast from its massive first quarter loss of CHF 11.54 billion (USD 11.25 billion).

It added that “A tax credit of approximately 3 billion Swiss francs would help boost its accounts for the quarter ending June 30th 2008 Meanwhile positive contributions from its wealth management and asset management divisions also offset a loss in the investment bank division.”

In an announcement ahead of its scheduled earnings report on August 12th 2008, the bank said that its investment bank division continued to post losses and asset write downs due to further market deterioration. However, its wealth management and asset management divisions had offset the impact.

The bank also revealed that money outflow was most pronounced in April, but that there was an improvement in May and June. It added that it expected its Tier 1 capital ratio a measure of capital adequacy to reach approximately 11.5% at the end of the quarter and that it did not need to raise new equity.